Mortgage Backed Security

Securitization is the issue of marketable securities backed by a pool of existing assets such as auto or home loans. After an asset is converted into a marketable security, it is sold. A securitization company or reconstruction company can raise funds from only the QIB (Qualified Institutional Buyers) by forming schemes for acquiring financial assets.

Mortgage Backed Securitization (MBS) is the securitization of mortgage loans against residential or commercial properties. The securitization of residential mortgage loans or mortgage-backed securitization (RMBS) includes traditional home loans and loans against property (LAP).

Mortgage pass-through securities were first created in the United States in 1970 by the Government National Mortgage Association (or Ginnie Mae, as it is more commonly known).