mortgage-backed security (Meaning)

Wordnet

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

  1. Mortgage-backed securities (MBSs) play a crucial role in the financial markets by securitizing residential and commercial mortgages.
  2. Investors who purchase MBSs are effectively purchasing a fractional interest in a pool of underlying mortgages.
  3. 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.
  4. Private-label MBSs, issued by banks and other financial institutions, are not backed by the government but may carry higher yields.
  5. MBSs can be structured into different tranches, each with its own risk and return profile.
  6. Adjustable-rate MBSs adjust their interest rates periodically based on a specific benchmark, while fixed-rate MBSs maintain a constant interest rate.
  7. MBSs are often used as collateral for repurchase agreements (repos), allowing banks and other institutions to raise short-term funding.
  8. The performance of MBSs is heavily influenced by the underlying mortgages, including factors such as default rates and prepayment speeds.
  9. Mortgage-backed securities have historically been a stable investment, providing investors with consistent returns.
  10. 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.