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What are Mortgage-Backed Securities?

April 26, 2017mortgage-backed securities

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What are Mortgage-Backed Securities?

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• Mortgage-backed securities are ownership interests in mortgage loans made by financial institutions (savings and loans, commercial banks and mortgage bankers). When an institution has made enough loans it will “pool” or package them together and sell them to mortgage investors. The institution will collect the principal and interest payments made by the homeowners and forward them to the mortgage investor.