It stands for private label mortgage backed security; a type of mortgage-backed security (MBS) that is issued by private entities (not government agencies) to back and issue a type of mortgages (mortgage loans) known as private-label mortgages/ non-agency mortgages. These securities are created and issued to the public investors.
Examples of private entities, that issue securities backed by non-agency mortgages, include banks, brokerage firms, and home constructing companies. The private label MBS/ non-agency MBS market offers mortgage financing to market players (individual mortgagors) that cannot meet the standards set for holding and investing in agency MBSs.
Non-agency MBSs offer an indirect means to invest in real estate without actually having to hold actual property, and even if the standards to invest are left for private entities to determine (just opposite to the case of agency MBSs).
