Explain the Characteristics of Mortgage Pass-Through Securities?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Explain the Characteristics of Mortgage Pass-Through Securities?

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Step 1

Mortgage Pass-Through Securities

Likewise called a pass-through, a security that is made when at least one home loan holders structure a home loan assortment (pool) and sell offers or authentications of cooperation in the pool. Income from the guaranteed pool is "passed on" to the holder of the security as a month to month head, intrigue, and prepayment installments.

Step 2

Mortgage loan Pass-through Security: shares in a pool of home loans offered to security speculators by a money related organization or government office, where contract installments are passed on fewer charges.

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