Mortgage backed security.

So what is a mortgage backed security?

So that's what a mortgage backed security is.

And you end up with a mortgage backed security.

Now let's do the example with a mortgage backed security.

And this is what this mortgage backed security market allows.

And that's why we say that it's a mortgage backed security.

That's how loans worked before the mortgage backed security industry really got developed.

But if you have a mortgage backed security, you can actually trade the security with someone else.

These were conforming loans, there wasn't this whole CDO and mortgage backed security market.

So these shares each of these one million shares this is a mortgage backed security.

Essentially you can almost fueled on interest to the owner of the Mortgage Backed Security.

And actually that's what the buyer of the mortgage backed security should try to figure out.

Welcome to my presentation on mortgage backed securities.

I have a whole video on mortgage backed securities.

This is actually a mortgage backed collateralized debt obligation.

And they rate these assets, these mortgage backed securities.

CDOs, collateralized debt obligations, are derived from mortgage backed securities.

And so money came from when the owners of each of these mortgage backed securities each, let's say, paid 1,000 for the mortgage backed securities.

You call them stock, or stock options, derivatives, mortgage backed securities.

Welcome back to my series of presentations on mortgage backed securities.

And these shares would be called Mortgage Backed Securities. or sometimes MBSes.

Those are essentially derivative securities that are derived from mortgage backed securities.

Well it comes from the investors in the actual mortgage backed securities.

So now we're going to take this mortgage backed security and introduce one step further kind of permutation or derivative of what this is.

That detail is not that important in understanding what a mortgage backed security is, but that will have to wait until the next presentation.

Maybe they'll buy mortgage backed securities, so it makes the mortgage market a little bit looser, a little bit more liquid.

But based on the model that we just constructed, I think the real return we're going to get on this mortgage backed security is 9 .

This is highly rated mortgage backed securities, maybe they have a slightly higher interest rate.

This is going to be a mortgage that's going to be backed by my house.

And now notice something here, the book value of this residential mortgage backed security, at least what this bank management says the book value is, is 4 billion.

Let's say we are thinking about investing in a mortgage backed security and we want to gauge for ourselves what we think the return is going to be.

But what you read about the most right now in the newspapers is mortgage backed collateralized debt obligations.

The mortgage...

Totally backed up.

All a mortgage backed security is a loan to a big group of people and you put them all together so that you can kind of, you know, be able to statistically give it properties.

I only have two minutes left in this presentation, so in the next presentation I'm going to focus on what this guy can now do with the loan to turn it into a mortgage backed security.

You might just want to watch the video on mortgage backed securities and collateralized debt obligations if you need a refresher there.

Or, it could even buy completely different assets, it could maybe buy mortgage backed securities, and the point here isn't just to increase the money supply the point in quantitative easing is maybe to kind of smooth over what's happening in certain parts of the market and so they thing that there's log jam in the mortgage backed security market that's why they're participating there.

Real security, security checks, security watch, security clearance.

He backed abruptly away.

LDB backed for KConfig

backed up for hours.

And this is what you probably read some articles about, these hedge funds with these computer models to value their mortgage backed securities.

Those who refuse to walk it will face strong Afghan Security Forces, backed by the United States and our allies.