DEFINITION of 'Mortgage Pool'

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.

BREAKING DOWN 'Mortgage Pool'

Pass-throughs or pools are comprised of mortgages with close to the same maturity and interest rate. A pool of mortgages that backs a more complex mortgage-backed security or CDO, however, might consist of mortgages of more varying interest rates and characteristics.

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

    A type of security whose cash flows come from residential debt ...
  2. Pass-Through Rate

    The rate on a securitized asset pool - such as a mortgage-backed ...
  3. Ginnie Mae Pass Through

    A type of investment issued by the Government National Mortgage ...
  4. Pool Factor

    The percentage of the original principal that is left to be distributed ...
  5. Current Coupon

    The to-be-announced (TBA) mortgage security of any issue for ...
  6. Jumbo Pool

    A pass-through Ginnie Mae II mortgage-backed security that is ...
Related Articles
  1. Investing

    Profiting Off of Increased Mortgage Rates (PTRIX,FMSFX,VMBSX)

    Learn why mutual funds that invest in mortgage-backed securities (MBS) are worth a look for investors wanting to capitalize on rising mortgage interest rates.
  2. Investing

    Fannie Mae and Freddie Mac, Boon Or Boom?

    These two companies are crucial to the mortgage market, but are they ticking timebombs?
  3. Personal Finance

    Are mortgage-backed securities backed by any guarantees?

    Actually, any mortgage-backed security (MBS) guarantee depends on who issued it.To review, an MBS is a security, created through the process of securitization, in which the underlying assets ...
  4. Investing

    Should You Invest In Fannie Mae Stock?

    If you're risk-adverse, you might want to avoid investing in Fannie Mae. But if you're up for it, high risk could translate to high reward.
  5. Investing

    VBMFX: Overview of World's Largest Bond Mutual Fund

    VBMFX: Find out top positions in the world's largest bond fund, the Vanguard Total Bond Market Index Fund.
  6. Investing

    The Top 5 Fannie Mae Shareholders (FNMA)

    Find about the individuals, funds and companies that are top shareholders of Fannie Mae stock. Learn about their profiles and their relationships with Fannie Mae.
  7. Small Business

    Remodeling The Housing Finance Industry

    The meltdown in mortgage-backed securities is bringing about reform in home financing.
  8. Investing

    Top 3 Mortgage Backed Securities (MBS) ETFs (MBB, MBG)

    Discover some of the best opportunities for investors seeking exposure to mortgage-backed securities through utilizing exchange-traded funds.
  9. Personal Finance

    Conventional Mortgage

    A conventional mortgage is any type of homebuyer's load that is not offered or secured by a government entity but rather available through a private lender.
RELATED FAQS
  1. How do you use the FNMA selling guide?

    Learn about Fannie Mae Selling Guide and find out details about how its parts provide support to the business relationship ... Read Answer >>
  2. What's the difference between a collateralized mortgage obligation (CMO) and a mortgage-backed ...

    Find out more about collateralized mortgage obligations and mortgage-backed securities and the difference between the two ... Read Answer >>
  3. Can small investors buy collateralized mortgage obligations (CMOs)?

    Read about collateralized mortgage obligations and their relationship with small investors, plus what risks small investors ... Read Answer >>
  4. What is the difference between a collateralized mortgage obligation (CMO) and a collateralized ...

    Both collateralized mortgage obligations (CMOs) and collateralized bond obligations (CBOs) are similar in that investors ... Read Answer >>
Trading Center