Original Face


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.

  1. Pool Factor

    The percentage of the original principal that is left to be distributed ...
  2. Pass-Through Certificate

    Fixed-income securities that represent an undivided interest ...
  3. Current Face

    The current par value of a mortgage-backed security (MBS). Current ...
  4. Pass-Through Security

    A pool of fixed-income securities backed by a package of assets. ...
  5. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
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