Alamo Capital has specialized in Mortgage-Backed Securities (MBS) and Collateralized Mortgage Obligations (CMOs) since 1987.  We have an in-house fixed income trading desk that is focused in maintaining a competitive bond inventory.  We are able to provide our investors access to the primary and secondary bond market.

Mortgage-backed securities (MBS) are bonds that allow you to invest in mortgage loans.  A mortgage security represents an ownership interest in mortgage loans made by financial institutions to finance the borrower’s purchase of a home or other real estate.  They are created when these mortgage loans are packaged, or “pooled,” by issuers or servicers, and securities are issued for sale to investors.  As the underlying mortgage loans are paid off by the borrowers, the investors in the securities receive payments of interest and principal.

MBS may be backed or issued by entities such as Government National Mortgage Association (GNMA or Ginnie Mae), the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac), and the Federal National Mortgage Association (FNMA or Fannie Mae)

Government National Mortgage Association

  • The only wholly-owned government corporation backed by the full faith and credit of the U.S. government.
  • Purpose is to ensure that mortgage funds are available throughout the U.S.
  • Guarantees the timely payment of principal and interest on loans originated through the Federal Housing Association (FHA), the Department of Veterans Affairs (VA), the Rural Housing Service (RHS) and Public and Indian Housing (PIH).
  • Instrumental in eliminating differences in the availability of mortgage credit across different regions.
  • Securities are available in a variety of maturities.
  • Minimum denomination for new issue securities is $25,000, with additional increments of $1,000.
  • Investments for less than $25,000 may be available in the secondary market.

 

Federal Home Loan Mortgage Corporation

  • A publicly owned government-sponsored enterprise not explicitly guaranteed by the U.S. government.
  • Has access to the U.S. Treasury.
  • Purpose is to increase the availability of mortgage credit for residential financing.
  • Raises most of its funds by developing and maintaining an active secondary market for residential mortgages.
  • Issues both mortgage-backed securities and standard corporate bonds, referred to as Government-Sponsored Enterprise (GSE) bonds. (AGENCY DEBT)
  • Securities available in $1,000 increments.

 

Federal National Mortgage Association

  • A publicly owned government-sponsored enterprise (see Agency/GSE Product Overview) not explicitly guaranteed by the U.S. government.
  • Has access to the U.S. Treasury.
  • Purpose is to maintain an active secondary market for mortgages.
  • Issues both mortgage-backed securities and standard corporate coupon bonds.
  • Securities available in $1,000 increments.

 

Contact Us:

If you are interested in learning more about MBS and CMO’s, please contact an Alamo Capital Broker by either filling out the form above, calling (877) 68-ALAMO – or – (877) 682-5266 or via email: [email protected].