Guaranteed Mortgage Certificate - GMC

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DEFINITION

A bond backed by a pool of mortgages. These bonds are issued by the Federal Home Loan Mortgage Corporation (Freddie Mac). These bonds pay out both interest and principal on a semiannual basis.

INVESTOPEDIA EXPLAINS

The pool is made up of residential mortgages. If the mortgage is paid off at a faster than anticipated rate, the investor will still receive the entire principal amount of their investment.


RELATED TERMS
  1. Residential Mortgage-Backed Security ...

    A type of security whose cash flows come from residential debt such as mortgages, ...
  2. Mortgage

    A debt instrument, secured by the collateral of specified real estate property, ...
  3. Mortgage-Backed Note

    A type of promissory note that is associated with a particular mortgage loan. ...
  4. Fannie Mae - Federal National Mortgage ...

    A government-sponsored enterprise (GSE) that was created in 1938 to expand the ...
  5. Freddie Mac - Federal Home Loan ...

    A stockholder-owned, government-sponsored enterprise (GSE) chartered by Congress ...
  6. Interest

    1. The charge for the privilege of borrowing money, typically expressed as an ...
  7. Interest Rate

    The amount charged, expressed as a percentage of principal, by a lender to a ...
  8. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage or collection ...
  9. Principal

    1. The amount borrowed or the amount still owed on a loan, separate from interest. ...
  10. Forbearance

    A temporary postponement of mortgage payments.
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