General Mortgage Knowledge · 20% of the SAFE exameasy
Correct answer: An investment instrument backed by a pool of mortgage loans
A mortgage-backed security (MBS) is a financial instrument created when multiple mortgage loans are pooled together and sold to investors as a single security. Investors receive payments derived from the underlying mortgage payments. It is not a guarantee to the borrower, nor is it a loan product offered to consumers, nor a federal insurance program like FHA or VA insurance.
CRAM ARCADE has the full NMLS question bank, timed practice exams, focus drills on your weakest category, flashcards and spaced repetition. No credit card.
Start studying free