0
Let us take into consideration the following entities that would be used during the explanation.
Bank 'B' - The Bank that is issuing mortgage loans
Customer 'C' - The person who has taken the mortgage loan from the bank
Agency 'A' - The Agency that is going to create the MBS
Investor 'I' - The person who is going to purchase the MBS
Customer 'C' approaches Bank 'B' with the request to issue a mortgage loan of Rs. 1,00,000/-. After all the scrutinizing process 'B' decides to grant a loan of Rs. 1,00,000/- to 'C'.
Agency 'A' buys the mortgage loan that was granted to 'C' at the rate of say Rs. 90,000/- and then packages it into a bunch of securities each with a face value of say Rs. 100/- each. Which means 'A' would be creating 1000 units of the MBS. These MBS units would be available for sale in the open securities market for investors to buy. Our Investor 'I' decides to buy these MBS units. He makes a payment of Rs. 1,00,000/- to 'A' and purchases the units. In many cases 'A' may opt to retain a portion of these units based on the loan mixture to generate revenue for itself.
'B' can now use this Rs. 90,000/- for granting fresh loans to other customers.
This is how a typical MBS gets created and sold in the open market.
What else can I help you with?
What alternatives to corporate stocks and bonds do securities firms offer?
These vehicles included municipal (state and local) bonds, junk bonds, options, mutual funds, asset and mortgagebacked securities, futures, and real estate investment trusts.
How can I go about figuring out my social security benefits?
To figure out your social security benefits, you can create an account on the Social Security Administration's website and view your estimated benefits. You can also contact the Social Security Administration directly for personalized assistance.
How can I figure out my social security benefits?
To figure out your social security benefits, you can create an account on the Social Security Administration's website and view your estimated benefits based on your earnings history. You can also contact the Social Security Administration directly for more personalized assistance.
Why did the major international credit card companies join forces in the late 90s?
joined forces in the Smart Card Security Users Group (SCSUG) to create a standardized system, called Common Criteria, for evaluating the security of smart cards
How can individuals strategically build wealth to create financial stability and security for themselves and future generations?
Individuals can strategically build wealth by setting financial goals, creating a budget, investing wisely, saving consistently, and diversifying their income streams. By being disciplined, patient, and informed about financial matters, individuals can create a solid foundation for financial stability and security for themselves and future generations.
How do you create a security answer on ea sports?
Yes
Which tool allows administrators to create and manage security profiles?
Security configuration Wizard
Why you must create a unique user account?
for a security reason
What alternatives to corporate stocks and bonds do securities firms offer?
These vehicles included municipal (state and local) bonds, junk bonds, options, mutual funds, asset and mortgagebacked securities, futures, and real estate investment trusts.
How do you create security attack tree?
Hide Evil TMNT inside it!
What are some companies who perform security audits?
Companies that use security audits would be many software based companies. Titania, Red Spin, and Yennik are a few tech-based companies that implement security audits. You can even create your own if you have the knowledge to create it.
What new cabinet position did president Bush create after 911?
United States Secretary of Homeland Security
What is the purpose of SOA security?
SOA security looks to combine applications on the computer without compromising security. In doing this they create much more efficient applications that are still securely programmed.
How can I go about figuring out my social security benefits?
To figure out your social security benefits, you can create an account on the Social Security Administration's website and view your estimated benefits. You can also contact the Social Security Administration directly for personalized assistance.
Which functionality is NOT provided by security templates in Windows operating systems?
Type your answer here... Create new security parametersAnswer Explanation: Security templates do not provide new security functionality. Instead, they simplify administration by enabling centralized access and distribution for existing security features.
What security ensures that only authorized individuals are able to create or change information?
Integrity
What protocol is used to create a basic layer of security for a wireless network?
A protocol that is used to create a basic layer of security for a wireless network is to set up a password and log in. This way no one else can use the wireless network, but the owner.
