Agency RMBS are securities collateralized by fixed rate mortgage loans, adjustable-rate mortgage loans or hybrid mortgage loans, or derivatives thereof. Payments of principal and interest on Agency RMBS are guaranteed by the Government National Mortgage Association (or Ginnie Mae), the Federal National Mortgage Association (or Fannie Mae), or the Federal Home Loan Mortgage Corporation (or Freddie Mac).
- Specified Pools are Agency RMBS collateralized by loans that have similar characteristics, such as loan balance, FICO score, coupon, and prepayment protection. Specified pool prepayment speeds are generally slower and more stable than generic RMBS pools. Our primary sources of financing are repurchase agreements.
- To-be-announced forward contracts or TBAs are agreements for the purchase (long notional positions) or sale (short notional positions) of Agency RMBS. TBAs may be used as a means of deploying capital until targeted investments are available or to take advantage of temporary displacements, funding advantages or valuation differentials in the marketplace.