Simple English definitions for legal terms
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A real-estate mortgage trust, also known as REMT, is a type of investment trust that deals with buying and selling mortgages on real property. Unlike other real estate investment trusts, REMTs do not invest in the actual property itself, but rather in the mortgages associated with it. This means that investors in REMTs are essentially investing in the loans that people take out to buy real estate, rather than the real estate itself.
A real-estate mortgage trust, also known as REMT, is a type of investment trust that deals with mortgages on real property instead of the property itself. This means that the trust buys and sells mortgages, which are loans that people take out to buy real estate, rather than buying and selling the actual real estate.
For example, let's say that a person wants to buy a house but doesn't have enough money to pay for it outright. They can take out a mortgage, which is a loan from a bank or other lender that is secured by the property. The lender then sells that mortgage to a real-estate mortgage trust, which collects the payments from the borrower and earns a profit from the interest on the loan.
Another example of a real-estate mortgage trust is one that invests in commercial mortgages. These are loans that are used to finance the purchase of commercial properties, such as office buildings or shopping centers. By investing in these mortgages, the trust can earn a steady stream of income from the interest payments.
Overall, real-estate mortgage trusts are a way for investors to earn income from the real estate market without actually owning any property. Instead, they invest in the mortgages that are used to finance real estate purchases.