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What are mortgage securities?
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29th Nov 2009 by Burt Carlson
Mortgage Securities (aka Mortgage Backed Securities or MBS) are debt obligations that represent claims on cash flow from pools of mortgage loans typically on residental property. These loans are purchased from banks, mortgage companies or other originators and placed into "pools" by certain entities. The entity then issues "securities" that are a claim on the cash flow and this is known as "securitization". Most MBS are issued by Ginne Mae, Freddie Mac and Fannie Mae or sometimes by private entities such as brokerage firms, banks or even homebuilders. The most common type of MBS security provides for the "pass-through" of the principal and interest to the investor. But there are more complicated MBS known as collateral mortgage obligations or mortgage derivatives.
Mortgage Securities (aka Mortgage Backed Securities or MBS) are debt obligations that represent claims on cash flow from pools of mortgage loans typically on residental property. These loans are purchased from banks, mortgage companies or other originators and placed into "pools" by certain entities. The entity then issues "securities" that are a claim on the cash flow and this is known as "securitization". Most MBS are issued by Ginne Mae, Freddie Mac and Fannie Mae or sometimes by private entities such as brokerage firms, banks or even homebuilders. The most common type of MBS security provides for the "pass-through" of the principal and interest to the investor. But there are more complicated MBS known as collateral mortgage obligations or mortgage derivatives.
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26th Oct 2009 In Investing
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Subjects: mortgage securities,
securities,