Mortgage-Backed Securities (MBS) are a form of financial instrument created by the government-sponsored enterprises (GSEs) that are one of the dominating forces of the mortgage market. MBS provide lenders with a source of liquidity, allowing them to issue mortgages without tying up large amounts of their own capital. They also provide investors with greater diversification, income, and security.
In the United States, Agency MBS are the primary driver of the mortgage market, with an estimated $9 trillion in outstanding volume. Agency MBS can be either fixed rate or adjustable rate, and they are backed by the full faith and credit of the United States government.
Key Elements:
* Mortgage-Backed Securities (MBS): A form of financial instrument created by the GSEs
* $9 trillion: Estimated outstanding volume of Agency MBS
* Government-backed: Backed by the full faith and credit of the United States government
* Fixed rate and adjustable rate: Types of Agency MBS available
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