DEFINITION of 'Original Face'

The par value of a mortgage-backed security at the time it is issued. Unlike most other types of bonds, mortgage-backed securities return both principal and interest to the holder in periodic payments (usually monthly). Over time, the outstanding principal balance of a mortgage-backed security will be reduced. The original face remains an important and distinguishing piece of information associated with a mortgage-backed security.

BREAKING DOWN 'Original Face'

By definition, a new issue mortgage-backed security will have a pool factor of 1; in other words, the original face will equal the current face. As the principal is paid down, the current face will be less than the original face.

The current face is derived by multiplying the original face by the current pool factor.

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