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Mbs Pool Number What It Is How It Works

Mbs Pool Number What It Is How It Works

Mbs Pool Number: What It Is, How It Works

What Is an MBS Pool Number?

An MBS pool number is an alphanumeric code used to identify a mortgage-backed security (MBS), also called a mortgage-related security or mortgage pass-through.

The MBS pool number identifies and provides information on investments made up of home loans sold by banks to a government-sponsored enterprise (GSE) or financial company. These loans are then bundled together to form a single investable security. The securities represent claims on the principal and interest payments made by borrowers in the pool.

MBS pool numbers are typically six digits long and are assigned by the issuer according to internal naming conventions. They are sometimes referred to as MBS series numbers.

Key Takeaways

  • An MBS pool number is an alphanumeric code assigned to a mortgage-backed security (MBS) by the issuer.
  • The six-digit codes identify the MBS and its issuer, providing access to information on the security.
  • MBS pool numbers convey information about the type and character of the security.

Understanding an MBS Pool Number

MBS pool numbers function as labels that distinguish one MBS from another. Issuers use specific naming conventions, allowing MBS traders to identify the issuer from the pool number. This skill is essential for research as it enables direct access to disclosures related to that MBS through the issuer’s pool number lookup system.

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Different issuers like Freddie Mac, Fannie Mae, and Ginnie Mae use distinct initial alpha characters in their MBS pool numbers to denote their pool as their issue. For example, a Freddie Mac 30-year pool number might be D54321, while a Fannie Mae 30-year pool number might be F54321.

MBS Pool Numbers vs. CUSIP Numbers

MBS traders prefer pool numbers over CUSIP, a nine-digit alphanumeric number assigned to all securities approved for trading in the United States and Canada by the Committee on Uniform Securities Identification Procedures.

The MBS pool number and CUSIP both provide access to the same information, but the former offers more immediate details. The MBS pool number is part of a pseudo-ticker that includes the issuer identifier, pool type, issue date, issuer ID, and more. Obtaining the same information using the CUSIP requires an additional step in the lookup process.

Special Considerations

Traders often refer to the larger pool record that includes all the information when mentioning the pool number, rather than the specific six-digit identifier. Regular MBS issuers have established naming conventions with prefixes and suffixes that indicate whether an MBS is a single-family loan pool, a construction loan pool, and so on.

By working with the pool number, traders can obtain most of the information they need from this expanded record without delving into disclosure forms. They can differentiate between newer and older issues from the same issuer.

While the MBS pool number and its accompanying prefixes and suffixes convey information about the type and character of the security, investors must visit the lookup pages on issuers’ websites to access detailed information.

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These lookup pages generally accept either the CUSIP number or the pool number. Once provided, investors can access historical coupon information, details on issue stratification into tranches, loan-level borrower information, interest adjustment dates, and more.

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