Mortgage pool

Mortgage pool,

Definition of Mortgage pool:

  1. Mortgage loans grouped together on the basis of the type of mortgage and the maturity period.

  2. A mortgage pool is a group of mortgages held in trust as collateral for the issuance of a mortgage-backed security. Some mortgage-backed securities issued by Fannie Mae, Freddie Mac, and Ginnie Mae are known as "pools" themselves. These are the simplest form of mortgage-backed security. They are also known as "pass-throughs" and trade in the to-be-announced (TBA) forward market.

  3. Mortgage pools are comprised of mortgages that tend to have similar characteristics—for instance, they will usually have close to the same maturity date and interest rate. Once a lender completes a mortgage transaction, it usually sells the mortgage to another entity, such as Fannie Mae or Freddie Mac. Those entities then package the mortgages together into a mortgage pool and the mortgage pool then acts as collateral for a mortgage-backed security.

How to use Mortgage pool in a sentence?

  1. An important benefit of mortgage pools is that they provide investors with diversification. .
  2. While mortgage-backed securities are backed by mortgage collateral with similar characteristics, collateralized debt obligations are backed by collateral with varying characteristics.
  3. Mortgage pools, which are groups of mortgages, tend to have similar characteristics, such as issuance date, maturity date, etc.
  4. Mortgage pools can focus on certain characteristics such as property type, which can cause varying risks and returns.

Meaning of Mortgage pool & Mortgage pool Definition