🌟 Exploring Mortgage Backed Securities with Nancy Alexander 🏠💡

☀️ Hope you had a great weekend. Got a neat question over the weekend about Mortgage Backed Securities (MBSs) that I wanted to share with you.
So, MBSs are basically like our first mortgage loans-they're in the prime position when it comes to getting paid back if there's a default. That means investors holding MBSs get first dibs on payments. 📜💵
On the flip side, second mortgages are like the backup plan and get paid after the first ones. The cool thing is, these first mortgage loans are bundled up and sold as MBSs on the stock market. 📊🏦
Now, can we invest in MBSs too? Absolutely! You can talk to a stockbroker and pick a specific "tranche" of a mortgage to invest in. Tranches are like different slices of mortgages based on factors like the type of loan, credit scores, and loan-to-value ratios, which all affect the level of risk and potential return. 📈💰
It's interesting to see how the crash of the savings and loans in the early 80s led to the rise of MBSs, driven by the need to manage interest rate risks over time. 📉
Got more questions about MBSs or anything related to mortgages? Give me a shout! 📞 Let's dive deeper into this fascinating world of lending. 💼🌐