Talk:Mortgage-backed security

I think this is the "correct" spelling. See google search mortgage+backed+security and asset+backed+security.--Jerryseinfeld 22:38, 4 Jan 2005 (UTC)

COMMENT BY A DIFFERENT USER

"Duration" has a specific technical meaning in this context. The word should link to the article about duration.

The MBS is not underwritten by "the origianl real estate." Anyone: what did the author mean?

Comment by a dfferent user:

The author is saying that IF the MBS wasn't backed by the original real estate, there would be no incentive for the improving crdit rating borrowers to stick with it etc. Fortunatly, they are.

MRBs and types of MBSs

I wanted to write about MRBs (mortgage revenue bonds) and couldn't find a proper place to put it. It seems that MBS classification is not very details at this moment.

I notice this article discusses both a "passthrough" and a "pass-through". I suppose the former occurs more quickly than the latter. Isn't that so? —Preceding unsigned comment added by 71.62.227.98 (talk) 18:41, 11 July 2008 (UTC)

Questions

1) Can anyone write up on history of mortgage-backed securities and MBS market? Did they exist for as long as Fannie Mae / Freddy Mac, or were they created at some later point?

2) Market value figures from "The MBS market" section seem highly suspect to me. How can total market value of all outstanding securities be on the order of 5 years' worth of issuance of agency MBS, considering that residential U.S. mortgages are usually for 30 years? Is that because the bulk of MBS represent something other than residential mortgages (maybe commercial mortgages or HELOCs), or because agencies practice buyback of their MBS? Does 6.1 trillion refer to agency MBS or all MBS?

3) What fraction of U.S. mortgages (residential/commercial) is covered by MBS? --Itinerant1 10:23, 14 September 2007 (UTC)

Answer #2 - because people refinance when rates drop, and since mtge rates dropped to the lowest point, pretty much ever, hardly any will be left from the '90's. Why keep paying 8.5% when you can refinance to 5%?

Also, 30yr MTGE rarely last the full 30yrs. People prepay or make double payments etc. People sell their house to move (pay-off loan). Also, refinance to a better rate, or different product (ARM) or to tap home-equity etc. Avg life of a 40yr MTGE is usually 6-9yrs. —Preceding unsigned comment added by 75.64.185.240 (talk) 00:16, 29 November 2007 (UTC)

75.64.185.240, this objection is dealt with in the article. Pdbailey (talk) 22:21, 6 May 2008 (UTC)

out of date

This article does not mention how thin this market is, or any of the contemporary happenings in the market. Pdbailey (talk) 22:28, 6 May 2008 (UTC)

sale of assets vs. debt offerings

early mortgage-backed securities (1970s-1980s) had the distinction in that some were a true sale of assets vs. others being a debt offering.

examples

sale of assets - the "pass-through" security such as GNMA pass-through certificates in which the investor owns an undivided interest in the underlying mortgage pool.

debt offering - what was called a "pay-through" bond. The issuer (typically a thrift (S&L or savings bank) or home builder) retains ownership of the mortgage pool and merely issues a bond collateralized by that pool. in this situation there is NO sale of assets.

both were typically issued via a single-purpose-entity structure.

it's been 20 years since i left the MBS field (1988...just as the collateralized mortgage obligation was still a very young pup) and moved to other areas. after leaving i didn't reallly pay too careful attention to the field. --68.173.2.68 (talk) 02:21, 7 October 2008 (UTC)