Question

the most common type of Mortgage-Backed security is:

A. the mortgage pass-through, a security that has the borrower's mortgage payments pass through the trustee before being disbursed to the investors.
	B. the participation certificate, a security which passes the borrower's mortgage payments equally among all the owners of the certificates.
	C. the securitized mortgage, a security which increases the liquidity of otherwise illiquid mortgages.
	D. collateralized mortgage obligations, a security which reduces prepayment risk.

Answer 1

Solution -

Option A) the mortgage pass-through, a security that has the borrower's mortgage payments pass through the trustee before being disbursed to the investors. is Correct Option .

Reason -

as per law or rule of a mortgage security Mortgage pass-through, a security that has the borrower's mortgage payments, passes through the Trustee before being distributed to the investors. so above Option as per rule is Correct Option .