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Gestation Repo
(redirected from Gestation Repos)

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Gestation repo
A reverse repurchase agreement between mortgage firms and securities dealers. Under the agreement, the firm sells federal agency-guaranteed MBS and simultaneously agrees to repurchase them at a future date at a fixed price.

Gestation Repo
A repurchase agreement between a mortgage provider and a security dealer. In a gestation repo, the mortgage company sells agency securities to the dealer and agrees to buy them back at a stated price at a certain point in the future. This provides a profit for the security dealer and short-term funding for the mortgage provider. See also: Double sale.


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Investment banking firms have been aggregating large blocks of loans awaiting securitization and selling participations in gestation repos to institutional investors starved for more yield on their short-term investments.
Some Wall Street firms have stepped in with gestation repos.
 
 
 
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