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Mortgage Pool

 
 

Group of mortgages sharing similar characteristics in terms of class of property, interest rate, and maturity. Investors buy participations and receive income derived from payments on the underlying mortgages. The principal attractions to the investor are Diversification and Liquidity, along with a relatively attractive yield. Those backed by government-sponsored agencies such as the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and Government National Mortgage Association have become popular not only with individual investors but with life insurance companies, pension funds, and even foreign investors.

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Real Estate Dictionary: Mortgage Pool
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A collection of loans of similar nature that are sold as a unit in the secondary market or used to back a security that is then sold in the capital markets.
Example: Lenders Mortgage Company packaged a mortgage pool consisting of $50 million worth of VA guaranteed loans. The package was sold to a group of investors who each put up a minimum of $25,000.

 
 

 

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Financial & Investment Dictionary. Dictionary of Finance and Investment Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.  Read more
Real Estate Dictionary. Dictionary of Real Estate Terms. Copyright © 2004 by Barron's Educational Series, Inc. All rights reserved.  Read more