Mortgage Backed Securities | Securitization of Mortgage Loans

mortgage backed securities

Mortgage Backed Securities are Investment instruments or debt securities that represents an undivided ownership interest in a group of mortgages. A pool of mortgages that are used as collateral for the issuance of securities in a secondary market. The security granted to the investor may provide that the loan is repaid by principal payments received from the underlying mortgages—‘pass-through’ securities, i.e. the security or obligation represents an undivided interest in the loans … [Read more...]

Collateralized Mortgage Obligation (CMO) A Defined Explanation

A Collateralized Mortgage Obligation (CMO) is a form of securitization. Collateralized Mortgage Obligation Securitization is the packaging of a number of asset-backed loans or mortgages into tradeable securities. The conversion of a pool of investments or a number of loans into the right to a bond or security that is partially or wholly dependent on the income from the underlying investments or loans. The process of transferring certain receivables, such as consumer loans, mortgage loans, … [Read more...]