Filter by Categories
Accounting
Banking

Finance




Residential Mortgage-Backed Security


A debt security that pays out based on payments from a pool of individual residential mortgages. It is asset-backed security (ABS) on which payments of principal and interest are made to the holders from the proceeds generated by a pool of residential mortgage. The underlying mortgages are posted as collateral to the benefit of the holders, securing the payment by the issuer of principal and interest on the securities.

An residential mortgage-backed security (RMBS) is structured in such a way as profits to investors are enhanced while risk is reduced to a minimum. However, if not structured properly, such securities can result in a great systemic risk that spill over an entire financial system.

Residential-mortgage-backed securities are popular in use by a special purpose vehicles (SPVs) as a component of a securitization process or structured products.



ABC
Finance, as a field of knowledge, is substantially wide-ranging and virtually encompasses everything in the realm of corporate finance, financial management, ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*