Mortgage Pool

Group of mortgages sharing similar characteristics in terms of class of property, interest rate, and maturity. Investors buy participations and receive income derived from payments on the underlying mortgages. The principal attractions to the investor are Diversification and Liquidity, along with a relatively attractive yield. Those backed by government-sponsored agencies such as the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and Government National Mortgage Association have become popular not only with individual investors but with life insurance companies, pension funds, and even foreign investors.