A mortgage pool is a collection of mortgages that are held in trust as collateral in the issuance of a mortgage-backed security. The simplest forms of mortgage pools are those offered by Fannie Mae, Freddie Mac, and Ginnie Mae.
What are the benefits of a mortgage pool?
Mortgage pools offer a wide variety of benefits over competing investment methods.
Mortgage pools include portfolios that are diversified geographically, by loan size, and by property type. This ensures that the risk involved in any given loan is minimal. The more diversified a mortgage pool is, the lower the risk that is passed on to the investor.
The fund managers at Alta Equities are experts when it comes to managing risk. Because our staff has its fingers on the pulse of the market, we are able to reduce risk by using sound judgment and underwriting criteria. We ensure that our investors don’t lose money even in the event of a foreclosure.
In general, real estate is notoriously illiquid. By investing through a mortgage pool, investors can draw upon a constant flow of capital to access their funds immediately. This is an invaluable asset for a property owner who is seeking to refurbish or renovate his or her property.
Mortgage pool funds are structured to deliver reliable monthly or quarterly returns. Whereas a rental property can sit for months without generating income, a mortgage pool fund provides consistent liquid cash flow for its investors.
Tried and True Results
Mortgage pool funds reduce uncertainty and promote further investment. While the real estate market has its whims and its swoons, a mortgage pool fund is a reliable way to make money amid all the madness. A mortgage pool with a strong track record is likely to remain successful in the future. Past results are predictive of future success.