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Home > QFINANCE Dictionary > Definition of mortgage-backed security

Definition of

mortgage-backed security

Stockholding & Investments

security backed by mortgages a security for which the collateral is the principal and interest on a set of mortgages

Recommended Further Reading (Term count)
  • United States of America
  • Banking Crisis
    In 2008, a combination of past bad lending decisions and too much exposure to badly performing, complex mortgage-backed investments pushed many of the world’s biggest banks to the brink of collapse as heavy losses decimated their capital bases.As the first symptoms of the global credit crunch began to emerge in 2006 as sub-prime, or higher-risk, US mortgage borrowers increasingly struggled to meet their repayments, the seeds of the global...
  • Securitization: Understanding the Risks and Rewards
    by Tarun Sabarwal
    In broad terms, securitization can be viewed as pooling receivables and selling claims to these receivables in capital markets. For example, a mortgage lender may pool together thousands of mortgages and sell claims on mortgage receivables to investors. Historically, the first securitizations in the 1970s in the United States were those of pools of mortgages. With the success of mortgage-backed securities, other groups of receivables were...
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    Securitization is the process of creating securities backed by a pool of loans or receivables. For a corporation, securitization is an alternative fund-raising process to the issuance of secured corporate bonds. The securities issued via the securitization process differ from traditional secured corporate bonds, where it is necessary for the corporate issuer to generate sufficient earnings to repay the bondholders. So, for example, if an...

Definitions of ’mortgage-backed security’ and meaning of ’mortgage-backed security’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’mortgage-backed security’ and other financial terms with our online QFINANCE Financial Dictionary.

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