MBS

Mortgage-Backed Securities (MBS) are investments that represent claims on the cash flows from a pool of mortgage loans. When people buy homes and get mortgages, these loans are bundled together and sold as securities to investors. In return, investors receive regular payments derived from homeowners' mortgage payments, including interest and principal. MBS provide liquidity to the mortgage market, allowing lenders to issue more loans. Their value depends on the timely repayment of the underlying mortgages. MBS are widely used by institutions and individual investors to earn income from the housing market.