Week N Mortgage Backed Securities

Question	Answer
What is a Mortgage Backed Security (MBS)	An asset/security backed by mortgages sold to investors
Who is involved in a National Housing Association (NHA) MBS?	CMHC/Administrator Issuers/Banks/Loans Companies etc Investors: Individuals/institutions
Difference between prepayable and non-prepayable?	Prepayable: Prepayment passed onto investor Non-prepayable: Yields lower than prepayable, because bank holds prepayment.
Calculating sale proceeds of MBS	Face Value * RPB Factor * Market Price + Accrued interest
Canadian Mortgage Bonds (CMB) are very different than MBS', with prepayment T/F	False Very similar, no prepayment
Why is prepayment bad?	Investors put their money away to be invested, not paid back right away (aka. not earning)

Resource summary

	Created by dylan_earl over 10 years ago