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Mortgage Backed Securities (MBS)

Basic to Advanced

4.7 Filled star Filled star Filled star Filled star Half star
Based on 1,345 ratings
see reviews
Starweaver Instructor Team and Paul Siegel

This course will introduce you to a variety of the more  commonly-encountered types of mortgage-backed securities, pass-through  securities, and CMO's, as well as a lot of the concepts used to assess  the attractiveness of mortgage-backed securities and a lot of the  details to help understand mortgage-backed securities and how they work. 

This course contains 21 lectures among 4 sections: 

  • Introduction to Mortgages and Mortgage Backed Securities

  • Pass Through Securities

  • Analysis of Pass Through Securities

  • Collateralized Mortgage Obligations (CMOs)

Read more

This course will introduce you to a variety of the more  commonly-encountered types of mortgage-backed securities, pass-through  securities, and CMO's, as well as a lot of the concepts used to assess  the attractiveness of mortgage-backed securities and a lot of the  details to help understand mortgage-backed securities and how they work. 

This course contains 21 lectures among 4 sections: 

  • Introduction to Mortgages and Mortgage Backed Securities

  • Pass Through Securities

  • Analysis of Pass Through Securities

  • Collateralized Mortgage Obligations (CMOs)

More about this course and Starweaver

This course is led by a seasoned capital markets industry practitioner and executive with many years of hands-on, in-the-trenches financial markets sales, trading and analysis work. It has been designed, produced and delivered by Starweaver. Starweaver is one of the most highly regarded, well-established training providers in the World, providing training courses to many of the leading financial institutions and technology companies, including:

Ahli United Bank; Mashreqbank; American Express; ANZ Bank; ATT; Banco Votorantim; Bank of America; Bank of America Global Markets; Bank of America Private Bank; Barclay Bank; BMO Financial Group; BMO Financial Services; BNP Paribas; Boeing; Cigna; Citibank; Cognizant; Commerzbank; Credit Lyonnais/Calyon; Electrosonic; Farm Credit Administration; Fifth Third Bank; GENPACT; GEP Software; GLG Group; Hartford; HCL; HCL; Helaba; HSBC; HSBC Corporate Bank; HSBC India; HSBC Private Bank; Legal & General; National Australia Bank; Nomura Securities; PNC Financial Services Group; Quintiles; RAK Bank; Regions Bank; Royal Bank of Canada; Royal Bank of Scotland; Santander Corporate Bank; Tata Consultancy Services; Union Bank; ValueMomentum; Wells Fargo; Wells Fargo India Solutions; Westpac Corporate Bank; Wipro; and, many others.

Starweaver has and continues to deliver 1000s of live in person and online education for organizational training programs for new hires and induction, as well as mid-career and senior level immersion and leadership courses.

If you are looking for live streaming education or want to understand what courses might be best for you in technology or business, just google:

starweaver journey builder starweaver[dot]com

Happy learning.

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What's inside

Learning objectives

  • Describe the characteristics and types of mortgage loans and how they are securitized into mortgage-backed securities (mbs)
  • Understand the role of mbs in the broader fixed income market and how they are used in portfolio construction and asset allocation strategies
  • Evaluate the suitability of different mbs for different investor objectives and risk tolerances
  • Determine the appropriate pricing and valuation techniques for different types of mbs
  • Analyze the impact of interest rates and prepayment rates on the value of mbs
  • Analyze the performance and risk characteristics of pass-through securities and how they differ from other types of mbs
  • To describe what are pass-through securities, their risks, and how prices & yields are calculated for these instruments
  • Understand the mechanics of collateralized mortgage obligations (cmos), their purpose and how they are structured to manage risk and return

Syllabus

Introduction to Mortgages and Mortgage Backed Securities

Just a brief "hello" and explanation for you.

Instructor Doug Carroll introduces the course.

Read more

This module introduces the concept of asset securitization and covers the basics of mortgage loans as a common type of securitized asset.

This module covers the basics of mortgage loans, including how they are originated, underwritten, and securitized in the financial market.

In this module, you will learn about pass through securities, including how they are used to pool and securitize various types of financial assets.

In this module, you will learn about the role of U.S. mortgage agencies in the housing market and how they work to provide financial assistance for homebuyers.

This module covers the underwriting guidelines used by mortgage agencies to determine eligibility for home loans.

This module will teach you about the structure of pass-through securities and how they work as a financial instrument.

In this module (part 1 of 2), you will learn about the cash flow dynamics of mortgages and how they are structured to generate income for investors.

In this second module on mortgage cash flows, you will learn about the various factors that can affect the performance and risk of mortgage investments.

In this module, you will learn about the cash flow characteristics of mortgage pools and how they are used in the financial market.

This module covers the concept of mortgage prepayments and how they can affect the performance and risk of mortgage investments.

This module discusses the risks associated with investing in pass-through securities, including prepayment risk and credit risk.

In this module, you will learn about the factors that influence the prices and yields of pass-through securities in the financial market.

In this module, you will learn about how to analyze and value pass-through securities using cash flow techniques.

This module covers MBS prepayments and the concept of negative convexity in fixed income securities.

In this module, you will learn about different methods for measuring and predicting mortgage prepayment rates, including the use of prepayment benchmarks.

This module covers the concept of the conditional prepayment rate and its role in the analysis and design of CMOs (collateralized mortgage obligations).

In this module, you will learn about the structure and characteristics of CMOs, including the use of sequential pay tranches to manage prepayment risk.

This module covers the structure and characteristics of Z bond tranches, which are a type of CMO tranche that is particularly sensitive to changes in prepayment rates.

In this module, you will learn about the structure and characteristics of PAC bond tranches, which are a type of CMO tranche that offer principal amortization protection to investors.

This module covers other types of CMO tranches, including IOs (interest-only) and PO (principal-only) tranches, and concludes the course.

Traffic lights

Read about what's good
what should give you pause
and possible dealbreakers
Provides a detailed overview of the different types of mortgage-backed securities
Provides a theoretical foundation in asset securitization and mortgage loans
Delves into the structure and characteristics of pass-through securities and collateralized mortgage obligations (CMOs)
Focuses on vital concepts such as prepayment rate and conditional prepayment rate, which are crucial in analyzing and designing CMOs
Covers various types of CMO tranches, including sequential pay tranches, Z bonds, PAC bonds, IOs, and POs, providing a comprehensive understanding of CMO structures

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Reviews summary

Mbs: comprehensive expert-led finance deep dive

According to students, this course offers a comprehensive and deep dive (positive) into Mortgage Backed Securities (MBS), including pass-through securities and CMOs. Learners frequently praise the instructor's deep industry expertise (positive) and ability to explain complex concepts clearly (positive), often with practical examples (positive) that enhance understanding. While many find it an indispensable resource for finance professionals (positive), some note that the 'basic' sections might assume a significant level of prior finance knowledge (warning), making it potentially challenging for absolute beginners (warning). A few also suggest more interactive elements or supplementary materials (warning).
Enhances professional knowledge with real-world examples.
"I particularly appreciated the practical examples which helped to solidify my understanding. As someone working in investment banking, this course significantly enhanced my knowledge."
"Fantastic! As a bond trader, I needed to brush up on MBS. This course provided exactly what I needed."
"I found there were enough practical examples to grasp the concepts, which some older reviews had questioned."
Detailed and current information on MBS topics.
"The content is comprehensive, covering all the basics and some advanced topics."
"The detailed breakdown of cash flow dynamics and agency underwriting was superb. Very current and relevant information."
"The depth of coverage on CMO tranches is impressive, especially PAC bonds and sequential pay structures."
Led by an expert, simplifying complex topics.
"The instructor has a deep understanding of MBS and CMOs and explains complex concepts in a very digestible manner."
"Excellent course! The instructor's expertise shines through every lecture."
"The instructor's industry experience is evident, making the theoretical aspects much more relatable."
Could benefit from more interactive tools and materials.
"I felt some sections, especially on Z-bonds and PAC tranches, could have gone into more detail with more numerical examples."
"My main feedback would be to add more interactive elements or quizzes. It's a lot of information, and active learning tools would make it even better."
"My only minor gripe is that the accompanying materials were minimal. More supplementary readings or practice problems would have been beneficial."
Not suitable for complete beginners in finance.
"It assumes a significant level of prior knowledge, which wasn't clearly stated. I'm relatively new to capital markets, and this felt more 'advanced' than 'basic'."
"For me, coming from a non-finance quantitative role, it was a bit tough. The 'basic' part felt more like a quick recap for experienced professionals."
"If you have some prior finance knowledge, it's a good refresher, but for a complete beginner, it might be overwhelming without supplementary reading."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Mortgage Backed Securities (MBS): Basic to Advanced with these activities:
Organize and review course materials
Prepare for success by organizing and reviewing key course materials.
Show steps
  • Download and print lecture slides, notes, and handouts.
  • Organize materials into a logical structure.
  • Review materials regularly to reinforce understanding.
Refresh your understanding of fixed income concepts
Strengthen your foundation by reviewing fixed income concepts relevant to MBS.
Browse courses on Fixed Income
Show steps
  • Review textbooks or online resources on fixed income.
  • Solve practice problems related to bond pricing and yield calculations.
Explore online resources for mortgage-backed securities
Enhance your knowledge of mortgage-backed securities by delving into specialized online resources.
Show steps
  • Identify reputable websites and articles that provide in-depth information on MBS.
  • Review the materials, taking notes on key concepts and industry trends.
  • Engage in online discussions or forums to exchange ideas and ask questions.
Five other activities
Expand to see all activities and additional details
Show all eight activities
Review 'Mortgage-Backed Securities' by Frank Fabozzi
Gain a comprehensive understanding of MBS by delving into this authoritative text, expanding your knowledge beyond the scope of the course.
View Fixed Income Mathematics, Fifth Edition:... on Amazon
Show steps
  • Obtain a copy of the book.
  • Read the text thoroughly, taking notes and highlighting key concepts.
  • Complete the exercises and case studies provided in the book.
Discuss mortgage-backed security case studies
Enhance your understanding of MBS through collaborative discussions with peers, analyzing real-world examples.
Show steps
  • Form study groups with classmates.
  • Select case studies of MBS issuances and analyze their structures, performance, and market impact.
  • Present your findings and engage in discussions with your group, sharing insights and perspectives.
Calculate mortgage-backed security prices
Reinforce your comprehension of mortgage-backed security pricing by working through sample calculations.
Show steps
  • Find sample mortgage-backed security data online or in textbooks.
  • Use the data to calculate the price of the security using the methods learned in the course.
  • Compare your results to published prices or those provided by your instructor.
Attend an industry workshop on mortgage-backed securities
Gain practical insights into the MBS industry by attending a workshop led by experts.
Show steps
  • Research industry workshops and conferences on MBS.
  • Register and attend the workshop.
  • Engage in discussions with experts and practitioners.
Develop a hypothetical mortgage-backed security issuance plan
Solidify your understanding of MBS issuance by creating a hypothetical issuance plan that reflects real-world practices.
Show steps
  • Define the purpose and objectives of the MBS issuance.
  • Determine the underlying pool of mortgages and their characteristics.
  • Structure the MBS, including tranche allocation and interest rate characteristics.
  • Prepare a prospectus or offering document that outlines the terms and conditions of the issuance.

Career center

Learners who complete Mortgage Backed Securities (MBS): Basic to Advanced will develop knowledge and skills that may be useful to these careers:

Reading list

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Course image
Rating
4.7 Filled star Filled star Filled star Filled star Half star
Effort
3.5 total hours
Via
Udemy
Instructors
Starweaver Instructor Team
Paul Siegel
Language
English
Traffic lights
Read about what's good
what should give you pause
and possible dealbreakers
Provides a detailed overview of the different types of mortgage-backed securities
Provides a theoretical foundation in asset securitization and mortgage loans
Delves into the structure and characteristics of pass-through securities and collateralized mortgage obligations (CMOs)
Focuses on vital concepts such as prepayment rate and conditional prepayment rate, which are crucial in analyzing and designing CMOs
Covers various types of CMO tranches, including sequential pay tranches, Z bonds, PAC bonds, IOs, and POs, providing a comprehensive understanding of CMO structures
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