mortgage-backed security (Meaning)
mortgage-backed security (n)
a security created when a group of mortgages are gathered together and bonds are sold to other institutions or the public; investors receive a portion of the interest payments on the mortgages as well as the principal payments; usually guaranteed by the government
Synonyms & Antonyms of mortgage-backed security
No Synonyms and anytonyms found
mortgage-backed security Sentence Examples
- Mortgage-backed securities (MBSs) play a crucial role in the financial markets by securitizing residential and commercial mortgages.
- Investors who purchase MBSs are effectively purchasing a fractional interest in a pool of underlying mortgages.
- Government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac issue MBSs, which are backed by the full faith and credit of the U.S. government.
- Private-label MBSs, issued by banks and other financial institutions, are not backed by the government but may carry higher yields.
- MBSs can be structured into different tranches, each with its own risk and return profile.
- Adjustable-rate MBSs adjust their interest rates periodically based on a specific benchmark, while fixed-rate MBSs maintain a constant interest rate.
- MBSs are often used as collateral for repurchase agreements (repos), allowing banks and other institutions to raise short-term funding.
- The performance of MBSs is heavily influenced by the underlying mortgages, including factors such as default rates and prepayment speeds.
- Mortgage-backed securities have historically been a stable investment, providing investors with consistent returns.
- However, during periods of economic downturn, MBSs can experience significant volatility due to increased defaults and decreased demand.
FAQs About the word mortgage-backed security
a security created when a group of mortgages are gathered together and bonds are sold to other institutions or the public; investors receive a portion of the in
No synonyms found.
No antonyms found.
Mortgage-backed securities (MBSs) play a crucial role in the financial markets by securitizing residential and commercial mortgages.
Investors who purchase MBSs are effectively purchasing a fractional interest in a pool of underlying mortgages.
Government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac issue MBSs, which are backed by the full faith and credit of the U.S. government.
Private-label MBSs, issued by banks and other financial institutions, are not backed by the government but may carry higher yields.
