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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved