Investopedia

Continue to Site »

Gnomes

Filed Under » ,
Dictionary Says

Definition of 'Gnomes'

15-year, fixed-rate, pass-through securities offered by the Federal Home Loan Mortgage Corporation, or Freddie Mac's, cash program. The securities offered under this program have a maturity of 15 years. A pass-through security pools debt obligations and passes income obligations from the person or entity that owes the debt, to the shareholders. A mortgage-backed certificate is an example of a pass through.
Investopedia Says

Investopedia explains 'Gnomes'

Under the Freddie Mac cash program, Freddie Mac buys mortgages for cash, then forms a pool of mortgages and sells mortgage participation certificates. These represent undivided interest, or an identical percentage interest or share, in these mortgages. Investors sell their mortgages through Freddie Mac's cash program. The 15-year mortgages sold to Freddie Mac form the pool of mortgages that back the securities referred to as gnomes.

Articles Of Interest

  1.

    Profit From Mortgage Debt With MBS

    Mortgage-backed securities can offer monthly income, a fixed interest rate and even government backing.

  2. Too Good To Be True: The Fall Of IndyMac

    Everything seemed to be going right for the bank giant, but it fell just as quickly as it had once risen.

  3. Top 6 U.S. Government Financial Bailouts

    U.S. bailouts date all the way back to 1792. Learn how the biggest ones affected the economy.

  4. How Fannie Mae And Freddie Mac Were Saved

    These mortgage giants had to be put under government conservatorship, driving home the gravity of the subprime crisis.

  5. Fannie Mae And Freddie Mac, Boon Or Boom?

    These two companies are crucial to the mortgage market, but are they ticking timebombs?

  6. Fannie Mae, Freddie Mac And The Credit Crisis Of 2008

    Is the U.S. Congress' failure to rein in these mortgage giants to blame for the financial fallout?

  7. Why Your Pension Plan Has Sovereign Debt In It

    One type of security pensions tend to invest in is sovereign debt, or debt issued by a government.

  8. 6 Popular ETF Types For Your Portfolio

    Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods.

  9. Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.

  10. Asset Allocation: The First Step Toward Profit

    Understanding the different asset classes is an essential part of portfolio diversification.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center