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MBS

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In financial terms, MBS stands for mortgage-backed securities. MBS are types of securities that are collateralized by the interest payment and principal payment of a residential mortgage or pool of residential mortgages. Although mortgage-backed securities (MBS) are not considered asset-backed securities (ABS), MBS are a form of ABS. Further, not all securities backed by mortgages qualify as a MBS. In order to qualify as MBS, an eligible MBS must be highly rated by the credit rating agencies (i.e. ranking within the top two tiers). MBS are sometimes referred to as mortgage pass through or mortgage-related securities. In cases where the MBS are more complex, MBS are referred to as collaterized mortgage obligations. MBS are typically assigned a MBS pool number to identify each MBS issue individually. Related type of MBS are commercial mortgage-backed securities (CMBS).



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