Mortgage-Backed Security (MBS)
- Mortgage-Backed Security (MBS)
- A type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by a accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.
Also known as a "mortgage-related security" or a "mortgage pass through."
When you invest in a mortgage-backed security you are essentially lending money to a home buyer or business. An MBS is a way for a smaller regional bank to lend mortgages to its customers without having to worry about whether the customers have the assets to cover the loan. Instead, the bank acts as a middleman between the home buyer and the investment markets.
This type of security is also commonly used to redirect the interest and principal payments from the pool of mortgages to shareholders. These payments can be further broken down into different classes of securities, depending on the riskiness of different mortgages as they are classified under the MBS.
Look at other dictionaries:
mortgage-backed security — A kind of investment backed by mortgage loans that have been packaged into pools in the secondary mortgage market. Payments on the mortgages generate the return on investment for the people who invest in these securities. Category: Bankruptcy,… … Law dictionary
Mortgage-backed security — En finance, un mortgage backed security (MBS) ou un titre hypothécaire est une valeur immobilière adossée à des actifs. Il s agit d une forme d asset backed security. Sa valeur de revente est garantie à la fois par un ensemble de portions d… … Wikipédia en Français
mortgage-backed security — ( MBS) or mortgage backed bond Securities composed of, or collateralized by, loans that are themselves collateralized by liens on real property. MBSs can be categorized into two major types. Pass through pools are mortgage backed bonds created by … Financial and business terms
mortgage backed security — International mortgage backed securities, Also referred to as MBS. debt securities (debt security) (such as bonds or notes), which are issued by a special purpose vehicle in the course of a securitisation and … Law dictionary
Mortgage-backed security — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security … Wikipedia
Mortgage Backed Security — Mortgage Backed Securities sind besicherte Anleihen, also durch Vermögenswerte gesicherte Wertpapiere, deren Bargeldflüsse durch die Zins und Tilgungszahlungen eines Pools von grundpfandrechtlich gesicherten Forderungen getragen werden. Im… … Deutsch Wikipedia
Commercial mortgage-backed security — Un Commercial mortgage backed security (CMBS) est une titrisation de crédits hypothécaires commerciaux couramment émis sur les marchés des capitaux aux États Unis. Il s agit d un mortgage backed security (MBS) adossé à des actifs commerciaux… … Wikipédia en Français
commercial mortgage-backed security — commercial mortgage backed securities (CMBS) International mortgage backed securities which are backed, that is funded by and secured over, a portfolio of mortgage loans secured on commercial properties. The principal revenue stream to the… … Law dictionary
residential mortgage-backed security — (RMBS) USA Debt security on which payments of principal and interest are made to the holders from revenue generated by an underlying pool of residential mortgage loans. The underlying residential mortgages are pledged to the holders of the… … Law dictionary
mortgage-backed security — noun an asset backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans. See Also: MBS … Wiktionary