Definition of MBS Depository

MBS Depository

A book-entry depository for GNMA securities. The depository was initially operated by
mbsCC and is currently in the process of becoming a separately incorporated, participant-owned, limitedpurpose
trust company organized under the State of New York Banking Law.

Depository transfer check (DTC)

Check made out directly by a local bank to a particular firm or person.

Depository Trust Company (DTC)

DTC is a user-owned securities depository which accepts deposits of
eligible securities for custody, executes book-entry deliveries and records book-entry pledges of securities in
its custody, and provides for withdrawals of securities from its custody.

Electronic depository transfers

The transfer of funds between bank accounts through the Automated
Clearing House (ACH) system.

International Depository Receipt (IDR)

A receipt issued by a bank as evidence of ownership of one or more
shares of the underlying stock of a foreign corporation that the bank holds in trust. The advantage of the IDR
structure is that the corporation does not have to comply with all the regulatory issuing requirements of the
foreign country where the stock is to be traded. The U.S. version of the IDR is the American depository
Receipt (ADR).

MBS servicing

The requirement that the mortgage servicer maintain payment of the full amount of
contractually due principal and interest payments whether or not actually collected.

Stripped mortgage-backed securities (SMBSs)

Securities that redistribute the cash flows from the
underlying generic mbs collateral into the principal and interest components of the mbs to enhance their use
in meeting special needs of investors.

Tombstone

Advertisement listing the underwriters to a security issue.

Blue-chip company

Large and creditworthy company.

Collateral trust bonds

A bond in which the issuer (often a holding company) grants investors a lien on
stocks, notes, bonds, or other financial asset as security. Compare mortgage bond.

Company-specific risk

Related: Unsystematic risk

Cost company arrangement

Arrangement whereby the shareholders of a project receive output free of
charge but agree to pay all operating and financing charges of the project.

Deed of trust

Indenture.

Electronic depository transfers

The transfer of funds between bank accounts through the Automated
Clearing House (ACH) system.

Equipment trust certificates

Certificates issued by a trust that was formed to purchase an asset and lease it
to a lessee. When the last of the certificates has been repaid, title of ownership of the asset reverts to the
lessee.

Grantor trust

A mechanism of issuing MBS wherein the mortgages' collateral is deposited with a trustee
under a custodial or trust agreement.

Holding company

A corporation that owns enough voting stock in another firm to control management and
operations by influencing or electing its board of directors.

Intercompany loan

Loan made by one unit of a corporation to another unit of the same corporation.

Intercompany transaction

Transaction carried out between two units of the same corporation.

Investment trust

A closed-end fund regulated by the Investment company Act of 1940. These funds have a
fixed number of shares which are traded on the secondary markets similarly to corporate stocks. The market
price may exceed the net asset value per share, in which case it is considered at a "premium." When the
market price falls below the NAV/share, it is at a "discount." Many closed-end funds are of a specialized
nature, with the portfolio representing a particular industry, country, etc. These funds are usually listed on US
and foreign exchanges.

Official unrequited transfers

Include a variety of subsidies, military aid, voluntary cancellation of debt,
contributions to international organizations, indemnities imposed under peace treaties, technical assistance,
taxes, fines, etc.

Personal trust

An interest in an asset held by a trustee for the benefit of another person.

Preauthorized checks (PACs)

hecks that are authorized by the payer in advance and are written either by
the payee or by the payee's bank and then deposited in the payee's bank account.

Private unrequited transfers

Refers to resident immigrant workers' remittances to their country of origin as
well as gifts, dowries, inheritances, prizes, charitable contributions, etc.

REIT (real estate investment trust)

Real estate investment trust, which is similar to a closed-end mutual
fund. REITs invest in real estate or loans secured by real estate and issue shares in such investments.

Term trust

A closed-end fund that has a fixed termination or maturity date.

Transfer agent

ndividual or institution appointed by a company to look after the transfer of securities.

Transfer price

The price at which one unit of a firm sells goods or services to another unit of the same firm.

Transferable put right

An option issued by the firm to its shareholders to sell the firm one share of its
common stock at a fixed price (the strike price) within a stated period (the time to maturity). The put right is
"transferable" because it can be traded in the capital markets.

Treasurer's check

A check issued by a bank to make a payment. Treasurer's checks outstanding are counted
as part of a bank's reservable depostits and as part of the money supply.

Trust deed

Agreement between trustee and borrower setting out terms of bond.

Trust receipt

Receipt for goods that are to be held in trust for the lender.

Unilateral transfers

Items in the current account of the balance of payments of a country's accounting books
that corresponds to gifts from foreigners or pension payments to foreign residents who once worked in the
country whose balance of payments is being considered.

Unit investment trust

Money invested in a portfolio whose composition is fixed for the life of the fund.
Shares in a unit trust are called redeemable trust certificates, and they are sold at a premium above net asset value.

Transfer price

The price at which goods or services are bought and sold within divisions of the same organization, as opposed to an arm’s-length price at which sales may be made to an external customer.

Companyspecific Risk

See asset-specific risk

limited liability company

an organizational form that is a hybrid of the corporate and partnership organizational
forms and used to limit the personal liability of the owners;
it is typically used by small professional (such as accounting) firms

negotiated transfer price

an intracompany charge for goods
or services set through a process of negotiation between
the selling and purchasing unit managers

service company

an individual or firm engaged in a high or moderate degree of conversion that results in service output

transfer price

an internal charge established for the exchange
of goods or services between organizational units
of the same company

transfer time

the time consumed by moving products or
components from one place to another

Parent company

A company that retains control over one or more other companies.

Subsidiary company

A company that is controlled by another company through ownership
of the majority of its voting stock.

Transfer price

The price at which one part of a company sells a product or service to
another part of the same company.

Transferred-in cost

The cost that a product accumulates during its tenure in another
department that is earlier in the production process.

company cost of capital

Expected rate of return demanded by investors in a company, determined by the average risk of the company’s assets and operations.

Transfer Payment

A grant or gift that is not payment for services rendered.

Bin transfer

A transaction to move inventory from one storage bin to another.

Interplant transfer

The movement of inventory from one company location to
another, usually requiring a transfer transaction.

Company Acquisitions

Assets acquired to create money. May include plant, machinery and equipment, shares of another company etc.

Finance Company

company engaged in making loans to individuals or businesses. Unlike a bank, it does not receive deposits from the public.

Insurance Company

A firm licensed to sell insurance to the public.

Trust Company

Organization usually combined with a commercial bank, which is engaged as a trustee for individuals or businesses in the administration of trust funds, estates, custodial arrangements, stock transfer and registration, and other related services.

EFT (electronic funds transfer)

Funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.

wire transfer

An electronic transmission of money from one place to another. For example, you might request that your bank transfer money from your bank account in Vancouver to the account of a relative in Quebec City. To do this, you would provide the relative’s name and account number, as well as the address of the bank in Quebec City. Your bank would then "wire" the funds, which would usually arrive within a couple of days.

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