Mortgage Backed Security
A mortgage-backed security ( English mortgage-backed security , abbreviated as MBS ) is a bond , their cash flows through the interest - and repayments a pool of mortgage be worn secured claims. It is therefore a special case of an asset-backed security (English asset-backed security , abbreviated ABS).
Mortgage-backed securities backed by subprime mortgage loans played a major role in creating the real estate bubble until 2008 and the financial crisis that followed when it burst. This is why one speaks synonymously of the so-called subprime crisis .
Properties and classification
In contrast to Pfandbriefe , mortgage-backed securities do not appear in the balance sheet of the originating entity (e.g. a bank), as this transfers the pool of the covering assets to the issuing entity (a special-purpose vehicle ) for carrying out the securitization .
Because mortgage borrowers can repay early, the cash flows are not known in advance and can only be estimated. The early repayment (English prepayment ) represents a risk for the investor.
Mortgage-backed securities can be differentiated according to the type of real estate behind the collateral:
- Commercial MBS (CMBS): These are backed by commercial real estate (such as residential complexes , retail and office buildings ).
- Residential MBS (RMBS): These are secured by private residential real estate.
The properties of the Commercial MBS vary depending on the term. While the longer term loans (5 years or more) often have fixed rates and prepayment restrictions, there are shorter term loans (1-3 years) usually with floating rate and free prepayment.
meaning
The total market value of all open US MBS at the end of the first quarter of 2007 was approximately $ 4.1 trillion. This is significantly more than the market value of any other open-ended asset-backed securities. The MBS market has outperformed the US Treasury bills and bonds market since 2000.
The issue volumes of the three major issuers Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC) in the years before 2007 were as follows:
- 2001: $ 1,093 billion
- 2002: $ 1,444 billion
- 2003: $ 2,131 billion
- 2004: $ 1,019 billion
- 2005: $ 967 billion
- 2006: $ 899 billion
Web links
- Fannie Mae's mortgage-backed securities page (English) Retrieved March 12, 2012
- Court filing. Pages 3-10 describe CMBS, and detail the roles of the various parties: Borrower, Seller, Underwriter, Depositor, Certificateholder (including high and low-risk investor), Servicer, Special Servicer, Trustee, S&P, SEC, IRS, Controlling Class .
Individual evidence
- ^ Everything you need to know about bonds . (English)
- ↑ Securities Industry and Financial Markets Association (SIFMA) ( Memento of the original of September 29, 2007 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ SIFMA overview of issue volumes ( Memento of the original of September 29, 2007 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
