Mortgage Pool
What is a Mortgage Pool?
A mortgage pool is a group of mortgages in a mortgage-backed security (MBS).
How Does a Mortgage Pool Work?
Once a lender completes a mortgage transaction, it generally sells the mortgage to another entity. The entities that buy mortgages -- for example, Fannie Mae and Freddie Mac -- package hundreds of mortgages together into a mortgage pool. The mortgage pool then acts as collateral for a mortgage-backed security.
Why Does a Mortgage Pool Matter?
An MBS is collateralized by a mortgage pool. Mortgages in a mortgage pool tend to have similar characteristics. For example, they may all be 30-year, fixed-rate mortgages.
MBSs should not be confused with CDOs, or "collateralized debt obligations." A CDO is collateralized by a pool of loans with varying characteristics. For example, they may have different terms (10-year, 15-year, 30-year) and adjustable rates.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.