A collateralized fixed income security in which a group of mortgages are pooled together and act as collateral for the issuance of the security. Depending on the specific structure of the security, some combination of principal and interest payments of the underlying mortgages are “passed through” to the security holder. Types of mortgages that serve as collateral include: level payment fixed rate mortgages, adjustable rate mortgages, balloon mortgages, and graduated payment mortgages. The majority of these securities are issued and/or guaranteed by government agencies such as GNMA (Government National Mortgage Association - “Ginnie Mae”), FNMA (Federal National Mortgage Association - “Fannie Mae”), and FHLMC (Federal Home Loan Mortgage Corporation - “Freddie Mac”). Only GNMA is an arm of the US government and as such, is backed by the full faith and credit of the US government. FNMA and FHLMC, which are government-sponsored entities, are generally recognized as AAA quality due to their close ties to the US government.

A debt issue secured by pools of mortgages. Mortgage loans made by banks and savings and loan associations are pooled together and sold to investors. Each investor purchases an undivided interest in the pool and receives interest and principal payments from the underlying mortgages. See: Collateralized Mortgage Obligation (CMO).

An ordinary bond backed by an undivided interest in a pool of mortgages.

An investment instrument backed by mortgage loans as security. Ownership is evidenced by an undivided interest in a pool of mortgages or trust deeds. Income from the underlying mortgages is used to pay interest and principal on the securities.

Security backed by a pool of mortgages, such as those issued by Ginnie Maeand Freddie Mac. also called mortgage-backed certificate.

A security evidencing either the ownership of an interest in a mortgage loan or pools of mortgage loans, or a separate obligation secured by a mortgage loan or pool of mortgage loans.

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

a debt obligation secured by a pool of underlying mortgages that carries a guarantee of timely payment of principal and interest

an instrument with its own risks, independent of those of the underlying mortgages

an ownership position in a group, or pool, of mortgage loans

Security created by a pooling of mortgages with similar rates of interest and maturities. Monthly interest and principal payments on these mortgages are passed through to investors as interest.

Ownership claim in a pool of mortgages or an obligation that is secured by such a pool. Also called a pass-through, because payments are passed along from the mortgage originator to the purchaser of the mortgage-backed security.

An investment instrument backed by mortgage loans as security. Ownership is evidenced by an undivided interest in pool of mortgages or trust deeds. Income from the underlying mortgages is used to pay off the securities, and provides a return on investment.

A security backed by mortgage debt obligations. Its principal amount is usually government guaranteed. Householders’ principal and interest payments pass to investors via the originating bank, through a government agency or investment bank.

a variety of asset backed securities representing an interest in a pool of mortgages. Australian issuers include FANMAC, PUMA & INTERSTAR.

A security that is secured by home and other real estate loans.

A Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.

A security that returns principal and interest monthly as payments are received on the underlying mortgages. They are made up of individual home mortgages guaranteed by the government agencies. The mortgages are packaged into pools by agencies such as: Government National Mortgage Assn. (GNMA) Federal National Mortgage Assn. (FNMA) Federal Home Loan Mortgage Corp. (FHLMC) Unscheduled repayment of principal can shorten the maturity of the bonds. (See "Prepayment Risk.")

A security guaranteed by pools of mortgages and used to channel funds from securities markets to housing markets. Ginnie Mae has a popular MBS program recognized for its low risk and high yield. The Ginnie Mae MBS security is a pool of VA and FHA mortgages put together as a bond. Freddie Mac and Fannie Mae also have MBS programs. ( See FHA , Fannie Mae , Freddie Mac , Ginnie Mae , VA loan)

A bond that represents a share in a pool of mortgages issued by U.S. government agencies, U.S. government-sponsored enterprises or mortgage lenders. Investors receive regular (generally monthly) interest payments and the principal is returned incrementally over the life of the investment. (See also CMO and Ginnie Mae.)

Security collateralized by mortgages that are issued by federal, state and local government agencies and private institutions. Designed to be long-term investments.

A security backed by a pool of mortgages.

Securities in which mortgage pools are used as backing.

A security backed by a group of mortgages issued by the Federal Home Loan Mortgage Corporation (FNMA) and the Federal National Mortgage Association (FHLMC). Investors of mortgage backed securities receive payments derived from the interest and principal of the underlying mortgages.

Securitized interest in a pool of mortgages. CMOs are a type of mortgage-backed security.

Certificates that pass-through principal and interest payments to investors.

Security backed by mortgages issued by private issuers, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Government National Mortgage Association. Investors' cash flow are based on the interest and principal payments made on the underlying mortgages.

A mortgage-backed security (MBS) is an asset-backed security whose cash flows are backed by the principal and interest payments of a set of mortgages. Payments are typically made monthly over the lifetime of the underlying loans.