Mortgage Backed Securities (MBS) Masterclass for Finance

Beginner to Advanced: Securitization, Cash Flows, CMOs, PAC Tranches & Financial Markets Mastery

Role Play

Created byStarweaver Experts, Paul Siegel, Globecon Experts, Doug Carroll

Last updated 4/2026

English

What you'll learn

Describe the characteristics and types of mortgage loans and how they are securitized into mortgage-backed securities (MBS)
Understand the role of mortgage-backed securities in the broader fixed income market and their use in portfolio construction and asset allocation strategies
Evaluate the suitability of different mortgage-backed securities for various investor objectives, and risk tolerances
Determine the appropriate pricing and valuation techniques for different types of MBS
Analyze the impact of interest rates and prepayment rates on the value of mortgage-backed securities
Assess the performance and risk characteristics of pass-through securities and how they differ from other types of MBS
Explain what are pass-through securities, their associated risks, and how prices and yields are calculated for these instruments
Understand the mechanics of collateralized mortgage obligations (CMOs), and how they are structured to manage risk and return

Course content

6 sections • 28 lectures • 3h 29m total length

Welcome!0:52
Introduction to Mortgage Backed Securities11:11
Instructor Doug Carroll introduces the course.
Asset Securitization and Introduction to Mortgage Loans11:50
This module introduces the concept of asset securitization and covers the basics of mortgage loans as a common type of securitized asset.
Mortgage Loans9:39
This module covers the basics of mortgage loans, including how they are originated, underwritten, and securitized in the financial market.
Hands-On Learning Activity: Introduction to Mortgages and Mortgage-Backed Securi1:00
This 60-minute Hands-On Learning activity is designed to help you apply concepts from the following lessons:
- Introduction to Mortgage-Backed Securities
- Asset Securitization and Introduction to Mortgage Loans
- Mortgage Loans

Introduction to Pass Through Securities8:17
In this module, you will learn about pass through securities, including how they are used to pool and securitize various types of financial assets.
US Mortgage Agencies9:28
In this module, you will learn about the role of U.S. mortgage agencies in the housing market and how they work to provide financial assistance for homebuyers.
Agency Underwriting Guidelines9:07
This module covers the underwriting guidelines used by mortgage agencies to determine eligibility for home loans.
Structure of Pass Through Securities10:12
This module will teach you about the structure of pass-through securities and how they work as a financial instrument.
Mortgage Cash Flows Part 110:57
In this module (part 1 of 2), you will learn about the cash flow dynamics of mortgages and how they are structured to generate income for investors.
Mortgage Cash Flows Part 28:45
In this second module on mortgage cash flows, you will learn about the various factors that can affect the performance and risk of mortgage investments.
Mortgage Pool Cash Flows8:59
In this module, you will learn about the cash flow characteristics of mortgage pools and how they are used in the financial market.
Mortgage Prepayments10:33
This module covers the concept of mortgage prepayments and how they can affect the performance and risk of mortgage investments.
Hands-On Learning Activity: Pass-Through Securities0:43
This 60-minute Hands-On Learning activity is designed to help you apply concepts from the following lessons:
- Introduction to Pass-Through Securities
- US Mortgage Agencies
- Agency Underwriting Guidelines
- Structure of Pass-Through Securities
- Mortgage Cash Flows Part 1
- Mortgage Cash Flows Part 2
- Mortgage Pool Cash Flows
- Mortgage Prepayments

Risks of Pass Through Securities9:20
This module discusses the risks associated with investing in pass-through securities, including prepayment risk and credit risk.
Pass Through Securitries Prices and Yields7:41
In this module, you will learn about the factors that influence the prices and yields of pass-through securities in the financial market.
Pass Through Securities Cash Flows and Valuation9:32
In this module, you will learn about how to analyze and value pass-through securities using cash flow techniques.
MBS Prepayments and Negative Convexity10:23
This module covers MBS prepayments and the concept of negative convexity in fixed income securities.
Prepayment Benchmarks8:53
In this module, you will learn about different methods for measuring and predicting mortgage prepayment rates, including the use of prepayment benchmarks.
Hands-On Learning Activity: Analysis of Pass-Through Securities0:42
This 60-minute Hands-On Learning activity is designed to help you apply concepts from the following lessons:
- Risks of Pass-Through Securities
- Pass-Through Securities Prices and Yields
- Pass-Through Securities Cash Flows and Valuation
- MBS Prepayments and Negative Convexity
- Prepayment Benchmarks
Recommending MBS Structures to Match an Institutional Investor's Objectives

Conditional Prepayment Rate and Introduction to CMOs8:31
This module covers the concept of the conditional prepayment rate and its role in the analysis and design of CMOs (collateralized mortgage obligations).
CMOs and Sequential Pay Tranches10:44
In this module, you will learn about the structure and characteristics of CMOs, including the use of sequential pay tranches to manage prepayment risk.
Z Bond Tranches9:14
This module covers the structure and characteristics of Z bond tranches, which are a type of CMO tranche that is particularly sensitive to changes in prepayment rates.
PAC Bond Tranches11:23
In this module, you will learn about the structure and characteristics of PAC bond tranches, which are a type of CMO tranche that offer principal amortization protection to investors.
Other Types of Tranches6:37
This module covers other types of CMO tranches, including IOs (interest-only) and PO (principal-only) tranches, and concludes the course.
Hands-On Learning Activity: Collateralized Mortgage Obligations0:38
This 60-minute Hands-On Learning activity is designed to help you apply concepts from the following lessons:
- Conditional Prepayment Rate and Introduction to CMOs
- CMOs and Sequential Pay Tranches
- Z Bond Tranches
- PAC Bond Tranches
- Other Types of Tranches

Requirements

Proficiency in the English language
Basic math knowledge is expected for understanding calculations related to mortgage-backed securities
A financial calculator is recommended for efficient analysis and to get the most out of this course

Description

This course provides an in-depth introduction to the various types of mortgage-backed securities (MBS) commonly encountered in the market, including pass-through securities and collateralised mortgage obligations (CMOs). You will gain insight into key concepts used to assess the attractiveness of mortgage-backed securities and understand how these securities function within the broader mortgage-backed securitisation process.

You’ll also explore the pricing, performance, and risk characteristics of different types of mortgage-backed securities, and gain a deeper knowledge of how they work in real-world applications.

This course contains 21 lectures divided into 4 sections:

Introduction to Mortgages and Mortgage-Backed Securities

Pass-Through Securities

Analysis of Pass-Through Securities

Collateralised Mortgage Obligations (CMOs)

More about this course and Starweaver

This course is led by a seasoned capital markets industry practitioner and executive with many years of hands-on, in-the-trenches financial markets sales, trading and analysis work. It has been designed, produced and delivered by Starweaver. Starweaver is one of the most highly regarded, well-established training providers in the World, providing training courses to many of the leading financial institutions and technology companies, including:

Ahli United Bank; Mashreqbank; American Express; ANZ Bank; ATT; Banco Votorantim; Bank of America; Bank of America Global Markets; Bank of America Private Bank; Barclay Bank; BMO Financial Group; BMO Financial Services; BNP Paribas; Boeing; Cigna; Citibank; Cognizant; Commerzbank; Credit Lyonnais/Calyon; Electrosonic; Farm Credit Administration; Fifth Third Bank; GENPACT; GEP Software; GLG Group; Hartford; HCL; HCL; Helaba; HSBC; HSBC Corporate Bank; HSBC India; HSBC Private Bank; Legal & General; National Australia Bank; Nomura Securities; PNC Financial Services Group; Quintiles; RAK Bank; Regions Bank; Royal Bank of Canada; Royal Bank of Scotland; Santander Corporate Bank; Tata Consultancy Services; Union Bank; ValueMomentum; Wells Fargo; Wells Fargo India Solutions; Westpac Corporate Bank; Wipro; and, many others.

Happy learning.

Who this course is for:

This course is designed for analysts, associates, and professionals in commercial, corporate, and investment banking who are seeking to deepen their understanding of mortgage-backed securities. It's ideal for those looking to enhance their expertise in mortgage-backed securities investment, securities analysis, and financial markets.

Mortgage Backed Securities (MBS) Masterclass for Finance

What you'll learn

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Course content

Introduction to Mortgages and Mortgage Backed Securities5 lectures • 35min

Pass Through Securities9 lectures • 1hr 17min

Analysis of Pass Through Securities7 lectures • 47min

Collateralized Mortgage Obligations6 lectures • 47min

Closing Remarks1 lecture • 3min

Bonus Lecture1 lecture • 1min

Requirements

Description

Who this course is for: