Securitized Mortgage

Securitized Mortgage

A mortgage that is packaged into a mortgage-backed security (MBS). One mortgage may be securitized over several MBSs, and each MBS contains many securitized mortgages. A securitized mortgage gives the holder of the security, rather than the bank originating the loan, the right a claim on the principal and interest payments on that mortgage. Mortgages are securitized to remove them from a bank's balance sheet (which reduces risk) and to improve its cash flow.