Mortgage Allocations

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Definition: Mortgage Allocations

Mortgage allocations is a concept where during the settlement of a trade, the buyer must receive all the information from the seller regarding the mortgages. In this case, the seller is the one having the mortgage backed securities.

As per this method, the buyer must be briefed regarding all the mortgage related information 48 hours before 3pm on the trade settlement date.

This process is followed in to-be-announced or TBA trading between a buyer and a seller.

A mortgage backed security is a when an individual uses an asset like residential or commercial property as a mortgage against a loan.

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