Dictionary:

burnout

  (bûrn'out')

1. A failure in a device attributable to burning, excessive heat, or friction.
2. Aerospace.
   1. The termination of rocket or jet-engine operation because of fuel exhaustion or shutoff.
   2. The point at which this termination occurs.
3. 1. Physical or emotional exhaustion, especially as a result of long-term stress or dissipation.
   2. One who is worn out physically or emotionally, as from long-term stress.

A period of slowing mortgage prepayment within a mortgage backed security (MBS). This usually occurs after the mortgages start to mature. When some percentage of the underlying loans fail to prepay after an interest rate cycle, this is known as burnout. Those borrowers who did not refinance during the first interest rate cycle are less like to do so if interest rates drop again.

Investopedia Says:
The rate at which the underlying loans of an MBS prepay is largely a function of current interest rates relative to the interest rates on the underlying loans. If current interest rates fall to a certain point below the interest rate on an existing mortgage, borrowers have an incentive to refinance. An MBS can go through several cycles of interest rates over its term. Prepayment risk is a substantial risk for investors in MBSs and investors look for MBSs with burnout because burnout lessens the prepayment risks.

Related Links:
Mortgage-backed securities can offer monthly income, a fixed interest rate and even government backing. Profit From Mortgage Debt With MBS

Psychology: overexhaustion of a person.

Tax shelter: exhaustion of a tax shelter's benefits, when an investor starts to receive income from the investment. This income must be reported to the Internal Revenue Service, and taxes must be paid on it.

The elimination by heat of an invested pattern from a set investment to prepare the mold to receive casting metal.

A complex psychophysiological syndrome characterized by feelings of anxiety, tension, mental fatigue, physical exhaustion, and a loss of concern for the people with whom one is living and working. It appears as a result of chronic stress. Burnout comprises the complex interaction of a number of physiological and psychological components. It has been conceptualized as an imbalance between the psychological resources of an individual and the demands being made on those resources. It has been used with reference to a decrease in the psychological capabilities of athletes, coaches, and managers to deal with stressful situations. See also flame out.

(DOD, NATO) The point in time or in the missile trajectory when combustion of fuels in the rocket engine is terminated by other than programmed cutoff.

Burnout can refer to:

• Burnout (psychology), a psychological term for the experience of long-term exhaustion and diminished interest, especially in one's career.
• Burnout (vehicle), when a vehicle's tires are spun so they smoke.
• Burnout (series), a racing game series created by UK company Criterion Games, with a notable emphasis on dangerous driving and crashes.

• Burnout (video game) is also the first game in the same series.

• Burnout (film)
• Burnout (band), a rock band from Chicago or a now disbanded punk-rock band from Arkansas.
• Burnout (comics), a fictional Wildstorm character.
• "Burnout", a song by Green Day from their 1994 album Dookie.
• Burnout (software), an open source protection detector.
• Burnout (stereotype), a (typically) juvenile delinquent interested in heavy metal music, drugs and alcohol, vagrancy, and vandalism

This disambiguation page lists articles associated with the same title. If an internal link led you here, you may wish to change the link to point directly to the intended article.

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)