Mortgage Backed Securities (MBS)
A comprehensive professional course that introduces learners to the structure, functioning, valuation, and risks of Mortgage-Backed Securities (MBS). The programme explains how mortgages are pooled, securitised, and traded in financial markets, and how MBS influence housing finance, investment returns, and financial stability.
Learners gain a practical understanding of the MBS market, cash-flow structures, prepayment risks, valuation models, and regulatory frameworks. The course includes real-world examples, case studies, and analytical tools used by investors and financial institutions.
Module 1: Introduction to Mortgage Markets & Securitisation
Explains how mortgage lending works, the evolution of housing finance, and the role of securitisation. Covers the basic concept of converting mortgage loans into tradable securities.
Module 2: Structure and Types of Mortgage-Backed Securities
Breaks down agency vs. non-agency MBS, pass-through securities, CMOs (Collateralised Mortgage Obligations), REMICs, and other structured mortgage products.
Module 3: The Securitisation Process & Market Participants
Covers mortgage origination, loan pooling, credit enhancement, SPVs (Special Purpose Vehicles), rating agencies, servicers, trustees, and investors.
Module 4: Cash Flow Mechanics, Prepayments & Tranching
Explains how principal and interest are distributed, prepayment behaviour, tranching structures, sequential pay, PACs, TACs, and cash-flow modelling.
Module 5: Valuation of Mortgage-Backed Securities
Introduces pricing methods, yield analysis, duration/convexity, scenario modelling, discounting, and factors that influence MBS market values.
Module 6: Risk Analysis – Credit, Interest Rate & Prepayment Risk
Examines major risks affecting MBS performance, including credit defaults, interest rate volatility, prepayment uncertainty, and market liquidity.
Module 7: Regulation, Compliance & Global MBS Markets
Covers the regulatory frameworks governing MBS, including Basel rules, SEC reporting, oversight of mortgage agencies, and international market structures.
Module 8: Case Studies – MBS Success, Failures & the 2008 Financial Crisis
Analyses real-world examples, focusing on the role of subprime MBS in the global financial crisis, lessons learned, and modern reforms shaping today’s MBS markets.
Fundamentals of mortgage markets and securitisation
Different types and structures of MBS
Roles of originators, servicers, issuers, and investors
How MBS cash flows, tranches, and prepayments work
Techniques for valuing mortgage-backed securities
Understanding and analysing key MBS risks
Regulatory frameworks and global market practices
Lessons from historical MBS successes and failures
Finance and investment professionals
Bankers, credit analysts, and treasury staff
Portfolio managers and risk analysts
Students studying finance, banking, or capital markets
Professionals preparing for investment or securities roles
Anyone seeking to understand structured financial products
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