Final answer:
A traditional REMIC is involved in securitizing mortgages by pooling them and issuing mortgage-backed securities, in contrast to REITs, which provide loans for home building.
Step-by-step explanation:
A traditional real estate mortgage investment conduit (REMIC) is involved in the securitization of mortgages. Unlike a REIT, which is a company organized primarily to make loans to construction companies for home building, a REMIC is a vehicle used for pooling mortgage loans and issuing mortgage-backed securities. These securities allow for investment in a wide variety of residential and commercial real estate mortgages, thereby providing liquidity to the real estate market. REMICs are a crucial part of the mortgage finance industry as they help financial institutions to sell their mortgage loans, allowing them to free up capital and make more loans while providing investors with opportunities in real estate mortgages.
A traditional real estate mortgage investment conduit (REMIC) is a type of real estate investment trust (REIT) that deals with mortgage-backed securities. It is a financial intermediary that pools together mortgage loans and sells them as securities to investors. REMICs are commonly used as a means of raising capital for home construction and other real estate projects.