Housing Finance: Agency Issuance of Real Estate Mortgage Investment Conduits

Pursuant to a congressional request, GAO examined the effects of permitting the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC) to issue Real Estate Mortgage Investment Conduits (REMIC), specifically whether: (1) FNMA and FHLMC have the legal authority to issue REMIC; (2) FNMA and FHLMC have a competitive advantage over private issuers in issuing REMIC; (3) agency issuance of REMIC has beneficial effects on the housing and mortgage markets; and (4) agency-issued REMIC would lead the thrift industry to lose deposits.