Definitions for "Mortgage backed securities"
Keywords:  pool, ioette, puchaser, vadm, ette
Securities which are created out of a defined pool of real estate mortgages and issued by the GNMA, the FHLMC or the FNMA with investors receiving periodic payments consisting of both principal and interest.
(MBS) An investment instrument that provides an investor with part ownership in the cash flow from a pool of mortgages. These securities provide banks with additional funding and reduce their capital adequacy requirements by removing the assets from the balance sheet.
SECURITIES PURCHASED BY INVESTORS THAT ARE SECURED BY MORTGAGES. SUCH SECURITIES ARE ALSO KNOWN AS PASS-THROUGH SECURITIES SINCE THE DEBT SERVICE IS PAID BY THE BORROWER AND IS PASSED THROUGH TO THE PUCHASER OF THE SECURITY.