Skip to Main Content
The Handbook of Financial Instruments
book

The Handbook of Financial Instruments

by Frank J. Fabozzi
August 2002
Beginner content levelBeginner
847 pages
26h 4m
English
Wiley
Content preview from The Handbook of Financial Instruments

Chapter 14 Agency Mortgage-Backed Securities

Frank J. Fabozzi, Ph.D., CFA

Adjunct Professor of Finance School of Management Yale University

David Yuen, CFA

Senior Vice President Portfolio Strategist/Risk Manager Franklin Templeton Investments

Real estate backed securities are securities backed by a pool (collection) of mortgage loans. Residential or commercial mortgages can be used as collateral for such securities. Real estate securities backed by residential mortgage loans include mortgage passthrough securities, stripped mortgage-backed securities, and collateralized mortgage obligations. Collectively we refer to these securities as mortgage-backed securities (MBS). In this chapter we describe those issued by either the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). For the reasons described later in this chapter, these securities are referred to as agency MBS. In the next chapter, MBS not issued by one of these three entities are described. In Chapter 16 MBS backed by commercial mortgage loans are covered.

WHY IT IS IMPORTANT TO UNDERSTAND REAL ESTATE-BACKED SECURITIES

The U.S. mortgage market is the largest debt market in the world. A major innovation in the U.S. mortgage market has been the development of a wide range of mortgage designs from which borrowers can select. (We’ll discuss the major ones for residential mortgages later in this chapter.) ...

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Start your free trial

You might also like

Financial Times Handbook of Financial Engineering, The, 3rd Edition

Financial Times Handbook of Financial Engineering, The, 3rd Edition

Lawrence Galitz
Handbook of the Economics of Finance

Handbook of the Economics of Finance

George M. Constantinides, Milton Harris, Rene M. Stulz

Publisher Resources

ISBN: 9780471220923