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Pass-through Security
What does it mean?
A pool of fixed-income securities backed by a package of assets. A servicing intermediary collects the monthly payments from issuers, and, after deducting a fee, remits or passes them through to the holders of the pass-through security. Also known as a "pass-through certificate" or "pay-through security."
In Other Words...
The most common type of pass-through is a mortgage-backed certificate, where homeowners' payments pass from the original bank through a government agency or investment bank to investors.
Related Links
Asset Allocation within Fixed Income - An investor's fixed-income portfolio can easily beat the average bond fund. Learn how and why!
Related Terms
Collateralized Mortgage Obligation (CMO) | Commercial Mortgage Backed Securities (CMBS) | Fannie Mae | Ginnie Mae | Mortgage | Mortgage Backed Security (MBS) | Pass-Through Certificate
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