If mortgage back securities are worth so little, the yield should be very high?

So how do you invest in them?


If the problem is that the market value of them is low, they should be wonderful investments if you can stand the default risk which can't be all that high because they are bundled?


Am I correct and where do I buy them?


If mortgage back securities are worth so little, the yield should be very high?
All mortgage backed securities are not the same.





You are right in the math. When price goes down, the yield goes up. How about I'll give you a security with a calculated yield of 40%, but I'm broke and I'm not going to actually write you a check. I'm not going to pay off the principal either because housing values have fallen and the loan is worth more than the value of the collateral.





The mortgage backed securities that have fallen a lot in value have a default risk of 100%, i.e. they are already in default. If the borrowers were current, then the price wouldn't have gone down.If mortgage back securities are worth so little, the yield should be very high?
You could by stocks that buy them like fanny mae but that turned out to be a bust. I don't think they sell them to individual investors. You would need millions to buy a bundle. They are the reason the big name brokers are going broke!





Just my opinion.





Happy investing!
i just wish they would sell me my mortgages for 10 cents on the dollar