mortgage backed security

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Mortgage-Backed Security

A derivative whose value is derived from unpaid mortgages. This entitles the owner to a claim on the principal and interest payments on the particular mortgages backing the security. MBSs pay an interest rate that is usually related to the interest rates the homeowners are paying on their mortgages. The equivalent of the coupon on a mortgage-backed security is a percentage of the interest and principal paid on the mortgages backing the security. An obvious risk to an MBS is the possibility that interest rates may decline, causing homeowners to refinance their mortgages. This provides capital to MBS holders, but it comes at a time when purchasing more MBSs would yield less due to the decline in interest rates. More complicated versions of MBSs include the collateralized mortgage obligation and the mortgage derivative. These attempt to reduce the risk associated with declines in interest rates.

Another risk associated with mortgage-backed securities is the possibility that a substantial number of mortgages will default. A main proximate cause of the credit crunch, which began in 2006-2007, was the fact that many mortgage-backed securities backed by subprime mortgages began to default. See also: Credit risk, Liquidity risk, Credit crunch.

mortgage backed security (MBS)

See collateralized mortgage backed securities.
References in periodicals archive ?
- To analyze and forecast the market size of global MBS impact modifier market.
Carlyles US real estate arm, Carlyle Realty Partners, acquired MBS Media Campus from Oaktree Capital Management in 2007.
By shaping and championing Saudi's hyper-nationalism, MbS has a quick and effective way to generate domestic support for his reform efforts and aggressive foreign policy, bypassing the traditional means of drafting and enforcing public policy, which included myriad religious councils and ministries.
In the wake of Khashoggi's death, many had hoped that the position of MbS would be weakened, and that Trump and the US would distance themselves from the prince.
Sinan Ulgen, president du Center for Economics and Foreign Policy (Edam) a Istanbul, juge qu'un "affaiblissement de MBS constitue une victoire pour Erdogan, vu le positionnement de la Turquie sur le Qatar et les Freres musulmans".
MBS's 57-year-old cousin Muhammad bin Nayef was removed to make way for MBS.
During the event, MBS will also be showcasing its ruggedised, lightweight, end-to-end, fully-managed VSAT solutions for high performance, easy-to-use, rapid deploy connectivity on-the-move or on-the-pause.
MBS has two issues, he needs to show to his own constituency the Saudis that he has the capacity and acumen to alter the regional geopolitics and that he could achieve the valuation for Aramco, which everyone else felt unattainable.
Section 3 gives a brief overview of the MBS detector.
Synthesis and Characterization of CD105-Targeted MBs. Two types of microbubbles (MBs), including (1) CD105-targeted MBs and (2) nontargeted MBs with an isotype-matched control immunoglobulin G antibody, were prepared by using streptavidin-biotin binding chemistry according to a reported protocol [22, 23].
Hariri's resignation, which Lebanese sources told me came under pressure from MBS, risked causing instability in Lebanon that would have enhanced Hezbollah's power there, the opposite of what the Saudis wanted.
Moreover, one outcome of the concentration of power in MbS's hands is that he will be responsible for whatever goes wrong in future.