MortgageBacked Securities
Mortgage-backed securities are financial products that are created by bundling together a group of individual mortgage loans. These securities are then sold to investors, who receive payments based on the interest and principal payments made by the borrowers on the underlying mortgages. The cash flows generated from the mortgage payments are passed through to the investors, who may receive periodic payments or lump-sum payments depending on the structure of the security. Mortgage-backed securities are often issued by government-sponsored entities or private financial institutions and can vary in terms of risk and return based on the characteristics of the underlying mortgages.