What is mortgage-backed securities? Mortgage-backed securities are personal mortgage-backed securities (MBS? BackedSecurities is a kind of credit asset securitization product based on personal housing mortgage loan.
MBS is essentially the re-mortgage of personal housing loans of commercial banks. Through securitization transactions, commercial banks can withdraw a lot of funds and solve the common problems of commercial banks in China at present. The deposit term is shorter than the loan term? problem As a result, the liquidity risk of commercial banks has been resolved to a certain extent.
Banks make housing mortgage loans and bring cash flow every month. In order to raise funds, banks unpacked and packaged these mortgage loans to make new financial products and sell them to investors. Buying such financial products has no property ownership. As long as the mortgage lender can repay the mortgage on time, such financial products will continue to generate income. But if there is a large number of defaults, investors will suffer heavy losses.