Mortgage-backed securities pages explain what happens to many mortgages after origination and why that hidden market still affects ordinary borrowers. This section is about the secondary mortgage market, loan sales, agency-backed structures, servicing rights, and the institutions that help standardize mainstream mortgage lending.
Start Here
| If you are trying to understand… | Start with | Then read |
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| The basic market behind loan sales | Secondary Mortgage Market | Loan Sale and Mortgage Investor |
| Why ownership and servicing can move together or separately | Loan Sale | Servicing-Released, Servicing-Retained, Mortgage Servicing Rights (MSR), and Servicing Transfer |
| How a closed loan reaches the intended investor channel | Loan Delivery | Seller-Servicer, Best-Efforts Commitment, and Mandatory Commitment |
| How one mortgage becomes part of a tradable security | Securitization | Mortgage-Backed Security (MBS), MBS Trust, MBS Issuer, REMIC, and Pass-Through Security |
| How pooled loans are administered after securitization | Mortgage Pool | Pooling and Servicing Agreement, MBS Trustee, Master Servicer, Collateral File, and Mortgage Servicing Rights (MSR) |
| How a mortgage pool is summarized | Mortgage Pool | Pool Factor, Weighted Average Coupon, Weighted Average Maturity, and Weighted Average Loan Age |
| Why some loans fit mainstream execution more easily | Agency MBS | Fannie Mae, Freddie Mac, and Ginnie Mae |
| Why agency-backed execution has its own support costs | Agency Guarantee | Guaranty Fee and Agency MBS |
| What sits outside the mainstream agency channel | Non-Agency MBS | Credit Enhancement, Senior-Subordinate Structure, Excess Spread, Whole Loan, and Jumbo Loan |
| Why mortgage rates move with a broader bond market | To-Be-Announced (TBA) Market | MBS Price, Current Coupon, Rate Lock, Agency MBS, MBS Coupon, and Mandatory Commitment |
| How generic TBA trades become actual pool delivery | To-Be-Announced (TBA) Market | Specified Pool, TBA Settlement, Dollar Roll, and TBA Pair-Off |
| How lenders manage locked-loan exposure | Mortgage Pipeline | Pipeline Hedge, Rate Lock, Best-Efforts Commitment, and Mandatory Commitment |
| Why borrower payoff behavior matters to investors | Prepayment Risk | Conditional Prepayment Rate, Single Monthly Mortality, PSA Prepayment Model, Average Life, and Extension Risk |
| How some MBS cash flows are split into investor classes | Collateralized Mortgage Obligation | Tranche and Pass-Through Security |
What This Section Covers
Start with Secondary Mortgage Market, Mortgage-Backed Security (MBS), Mortgage Pool, Securitization, MBS Trust, MBS Issuer, MBS Trustee, and REMIC to understand the basic flow from closed loan to pooled security. Then use Specified Pool, Pool Factor, Weighted Average Coupon, Weighted Average Maturity, and Weighted Average Loan Age to understand how pools are summarized after the loans are grouped.
Then compare Agency MBS with Non-Agency MBS, and read Agency Guarantee, Guaranty Fee, Fannie Mae, Freddie Mac, Ginnie Mae, Credit Enhancement, Senior-Subordinate Structure, and Excess Spread to see how different parts of the U.S. mortgage market are supported and why some loans fit mainstream execution more easily than others.
Finish with Loan Sale, Loan Delivery, Collateral File, Seller-Servicer, Servicing-Released, Servicing-Retained, Mortgage Investor, Mortgage Servicing Rights (MSR), Pooling and Servicing Agreement, Master Servicer, Pass-Through Security, MBS Coupon, Pass-Through Rate, MBS Price, Current Coupon, Mortgage Pipeline, Pipeline Hedge, Best-Efforts Commitment, Mandatory Commitment, Prepayment Risk, Conditional Prepayment Rate, Single Monthly Mortality, PSA Prepayment Model, Average Life, Extension Risk, To-Be-Announced (TBA) Market, TBA Settlement, Dollar Roll, TBA Pair-Off, Collateralized Mortgage Obligation, Tranche, and Whole Loan to understand how mortgage cash flow reaches investors and why the company that made the loan, owns the loan, and services the loan are not always the same.
In this section
- Agency Guarantee
Credit-support feature behind certain agency MBS structures that helps make investor cash flows more predictable.
- Agency Mortgage-Backed Security
A mortgage-backed security issued or guaranteed through the main agency framework.
- Average Life
MBS timing measure estimating when principal is expected to be returned to investors.
- Best-Efforts Commitment
Secondary-market commitment where a lender generally delivers a specific closed loan if it closes.
- Collateral File
Loan document package that supports ownership, enforceability, and delivery of mortgage collateral.
- Collateralized Mortgage Obligation
Structured mortgage security that divides mortgage cash flows into classes with different payment behavior.
- Conditional Prepayment Rate
Annualized measure of how quickly mortgage pool principal is expected to prepay.
- Credit Enhancement
Support feature intended to reduce credit risk to certain mortgage-backed security investors.
- Current Coupon in MBS
Market-implied mortgage-backed security coupon area used as a reference point for current production.
- Dollar Roll
TBA-market transaction that sells one agency MBS position and buys a similar later-settling position.
- Excess Spread
Extra interest cash flow in an MBS structure that may support fees, losses, or investor protection.
- Extension Risk
MBS risk that mortgage loans remain outstanding longer than investors expected.
- Fannie Mae
A government-sponsored enterprise that supports much of the conventional conforming mortgage market.
- Freddie Mac
A government-sponsored enterprise that supports much of the conventional conforming mortgage market.
- Ginnie Mae
The government corporation that guarantees certain mortgage-backed securities tied to government-loan programs.
- Guaranty Fee
Fee associated with agency-style mortgage guarantees that helps compensate for credit risk and guarantee support.
- Loan Delivery
Post-closing step where a mortgage is delivered to an investor, agency, or secondary-market execution.
- Loan Sale
The transfer of mortgage ownership or economic interest after origination.
- Mandatory Commitment
Secondary-market commitment with a firmer lender obligation to deliver mortgage loans or securities.
- Master Servicer
Entity that oversees servicing administration for loans in a securitized mortgage structure.
- MBS Coupon
Stated cash-flow rate on a mortgage-backed security, distinct from the borrower's mortgage rate.
- MBS Issuer
Entity responsible for issuing mortgage-backed securities backed by a pool of mortgage collateral.
- MBS Price
Market price of a mortgage-backed security, one input behind many mortgage rate sheets.
- MBS Trust
Legal trust or issuing vehicle that holds mortgage collateral for a mortgage-backed security.
- MBS Trustee
Trustee party with document-defined responsibilities in a mortgage-backed securities transaction.
- Mortgage Investor
The party that owns or economically benefits from a mortgage after origination.
- Mortgage Pipeline
Group of mortgage applications, locked loans, or closed loans moving toward funding and investor delivery.
- Mortgage Pool
Group of mortgage loans assembled to support a mortgage-backed security or investor transaction.
- Mortgage Servicing Rights
The contractual rights to service mortgage accounts and collect servicing income.
- Mortgage-Backed Security
An investment security backed by a pool of mortgage loans.
- Non-Agency Mortgage-Backed Security
A mortgage-backed security outside the main agency-backed or agency-guaranteed framework.
- Pass-Through Rate
Rate of mortgage cash flow passed through to investors in a pass-through mortgage security.
- Pass-Through Security
An MBS structure that passes pooled principal and interest cash flow through to investors.
- Pipeline Hedge
Secondary-market position used by a lender to manage rate-lock risk in its mortgage pipeline.
- Pool Factor
MBS measure showing how much of a mortgage pool's original principal remains outstanding.
- Pooling and Servicing Agreement
Document governing how pooled mortgage loans are serviced and administered for an MBS transaction.
- Prepayment Risk
MBS risk that mortgage borrowers repay sooner than expected, changing investor cash flow.
- PSA Prepayment Model
Market convention for expressing mortgage prepayment speed relative to a standard benchmark.
- Real Estate Mortgage Investment Conduit (REMIC)
Tax-oriented securitization structure commonly used for mortgage-backed securities.
- Secondary Mortgage Market
The market where closed mortgages are sold, pooled, financed, or securitized after origination.
- Securitization
The process of pooling mortgage loans and turning them into tradable securities.
- Seller-Servicer
Mortgage company approved to sell loans into an investor channel and service loans under that channel's rules.
- Senior-Subordinate Structure
MBS structure that allocates losses to subordinate classes before senior investor classes.
- Servicing-Released
A loan-sale setup where the original seller does not keep servicing, so ownership and servicing are positioned to move together.
- Servicing-Retained
Loan-sale structure where the seller keeps servicing rights after selling the mortgage asset.
- Single Monthly Mortality
Monthly measure of mortgage pool principal that prepays ahead of schedule.
- Specified Pool
Identified mortgage pool named for delivery or analysis instead of traded only through a generic TBA description.
- TBA Pair-Off
Offsetting a TBA or delivery position instead of delivering the expected mortgage security.
- TBA Settlement
Settlement step in which a to-be-announced agency MBS trade is completed with eligible mortgage pools.
- To-Be-Announced Market
The forward market where many agency MBS trades occur before exact pools are named.
- Tranche
Class or slice of a structured mortgage security with its own cash-flow priority or timing behavior.
- Weighted Average Coupon
Average note-rate measure for loans in a mortgage pool, weighted by remaining balance.
- Weighted Average Loan Age
Balance-weighted measure of how long loans in a mortgage pool have been outstanding.
- Weighted Average Maturity
Balance-weighted measure of remaining scheduled maturity across loans in a mortgage pool.
- Whole Loan
An individual mortgage sold or held as a single asset instead of in a pooled security.