Question: What do you mean by government-sponsored enterprises (GSEs)?
Answer: Both Freddie Mac and Fannie Mae are government-sponsored enterprises (GSEs). This is backed by government and but not controlled by the Government.
Question: Who issues the NonAgency RMBS?
Answer: NonAgency RMBS are issued by thrifts, commercial banks, or private conduits that are not backed by any government entity.
Question: What do you mean by credit enhancements?
Answer: As you know NonAgency RMBS are not backed by the government agency and their credit value needs to be enhanced. And to do that these securities are structured so as to provide credit enhancement that support the credit ratings that they receive.
Question: What are the different forms of the RMBS?
Answer: You can consider RMBS in three forms as below - MBS-Pass-Through: - Collateralized mortgage Obligations (CMOs) - Stripped Mortgage Backed Securities Agency RMBS can be in all three forms. NonAgency RMBS can only be in the CMO form, hence that is always referred as NonAgencyCmo market.