Lehman Brothers Mortgage-Backed Securities Index

DEFINITION of 'Lehman Brothers Mortgage-Backed Securities Index'

An index made up of mortgage-backed securities that is used for benchmarking purposes. The Lehman Brothers MBS Index consists of fixed-rate securities, such as mortgage pools created by the Government National Mortgage Association (GNMA), Federal Home Loan Mortgage Corp (FHLMC) and Federal National Mortgage Association (FNMA). This index serves as a performance benchmark for many mortgage-backed securities funds.

BREAKING DOWN 'Lehman Brothers Mortgage-Backed Securities Index'

For a mortgage-backed security to be included in the index, it must have a minimum principal amount of $50 million. The securities within the index have an average life between 15 and 30 years. The MBS Index is a subset of the Lehman Brothers Aggregate Bond Index, which includes a larger variety of benchmark bonds.

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RELATED FAQS
  1. What are the best ways to invest in mortgage-backed securities (MBS)?

    Find out how you can start investing in real estate through mortgage-backed securities. Read Answer >>
  2. What is securitization?

    Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming ... Read Answer >>
  3. Why do MBS (mortgage-backed securities) still exist if they created so much trouble ...

    Read several different arguments in favor of allowing the trade of mortgage-backed securities, even after the financial crisis ... Read Answer >>
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    Find out more about collateralized mortgage obligations and mortgage-backed securities and the difference between the two ... Read Answer >>
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    Actually, any mortgage-backed security (MBS) guarantee depends on who issued it.To review, an MBS is a security, created ... Read Answer >>
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    Yes, if your mortgage lender goes bankrupt you do still need to pay your mortgage obligation. Sorry to disappoint, but there ... Read Answer >>
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