Net Interest Margin Security

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Net Interest Margin Security

A security based on the value of excess cash flows received by a mortgage-backed security. That is, if an MBS receives more cash flows than are needed to make coupon and principal payments to holders, it may place these cash flows into a different account and issue NIMS entitling the holders to these cash flows.
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The required consents for a given loan modification will be even more difficult to obtain if(I) a pool of mortgage securities includes interests in other pools of mortgage loans, (2) any homeowner has more than one mortgage loan (each loan is usually securitized separately and included in a separate pool), (3) any homeowner has private mortgage insurance, which is generally terminated by a loan modification, (4) any net interest margin securities with respect to any pool (representing the residual or "equity" interest in such pool) have been insured by an insurer, since such insurer must also generally consent to any amendment to the pooling and servicing agreement, and (5) any loan modifications are significant enough to jeopardize the tax-free REMIC status of the pool.