REMIC stands for Real Estate Mortgage Investment Conduit. It’s a special type of investment that is backed by real estate, and consequently tends to be less volatile than other forms of investment (though there have still been crashes). A REMIC consists of mortgage securities that have been repackaged, so that investors are able to invest in the real estate market without strictly having to own real property. REMICs provide additional liquidity to the mortgage market, which in turn makes it easier for banks to leverage themselves and continue to lend even if they don’t have the actual cash at hand. Investors are subject to more volatility than the actual real estate market, but can still benefit from the stability of the real estate market.
A REMIC is required to have its own EIN. It is a separate investment vehicle that takes funds from a number of investors. Like any business or individual, a REMIC can apply for an EIN online, through the mail, or through fax. A short application form will validate the REMIC’s information, and someone will need to be responsible for corresponding with the IRS regarding the company’s status. The REMIC will need its own EIN for the purposes of tax reporting.