Mortgage Backed Securities (MBS): Part I

edX Mortgage Backed Securities (MBS): Part I

Platform
EdX
Provider
New York Institute of Finance
Effort
2 hours a week
Length
4 weeks
Language
English
Cost
$450
Part of
Course Link
Overview
This course begins with an overview of the mortgage backed securities market. We’ll learn about the characteristics of mortgage-backed securities and identify the factors that cause U.S. mortgage-backed securities to be considered a different category of fixed income securities compared to asset-backed securities.

We’ll learn about the U.S. mortgage agencies and be able to distinguish among them regarding their legal status, nature of the guarantees they offer and types of mortgages they securitize. We’ll look at the basic features of agency pass-through securities and collateralized mortgage obligations (CMOs) and how their structural differences impact cash flows received by investors. We’ll also get familiarized with mortgage-related terminology such as non-recourse debt, underwater mortgages and short sales as well as their implications for mortgage loans and their consequences for the risk and expected returns to investors in mortgage-backed securities and learn about the main aspects involved in the creation of an agency pass-through security.

We’ll learn about mortgage cash flows and prepayments and also learn how the interaction between prepayment risk and reinvestment risk adversely impacts holders of pass-through securities in both rising and falling interest rate environments. We’ll learn how to distinguish between rate of return and the different yields associated with mortgage-backed securities and get introduced to the commonly used prepayment benchmarks for expressing prepayment speeds. We’ll wrap up this course with an understanding of bond math, spreads used in assessing the risk and relative value, option-adjusted spread and collateralized mortgage obligations.

This course is part 1 of the New York Institute of Finance’s Mortgage Backed Securities (MBS) Professional Certificate program.

Syllabus
  • Module 1: Introduction
  • Module 2: Overview of the Mortgage Backed Securities Market
  • Module 3: Mortgage Loans
  • Module 4: Mortgage Pass-through Securities
  • Module 5: Mortgage Cash Flows and Prepayments
  • Module 6: Mortgage Pass-through Securities: Risk and Return
  • Module 7: Bond Math of Mortgage Backed Securities
  • Module 8: Analysis of Pass-through Securities
  • Module 9: Collateralized Mortgage Obligations (CMOs)

Taught by
Douglas Carroll

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