Mortgage Pool
Group of mortgages sharing similar characteristics in terms of class of
property, interest rate, and maturity. Investors buy participations and receive income
derived from payments on the underlying mortgages. The principal attractions to the investor
are Diversification and Liquidity, along with a relatively attractive yield.
Those backed by government-sponsored agencies such as the Federal Home Loan Mortgage Corporation,
Federal National Mortgage Association and Government National
Mortgage Association have
become popular not only with individual investors but with life insurance companies, pension
funds, and even foreign investors.
