A mortgage-backed security is a term that became popular during the global market crash of 2008 that dragged big financial institutions like Lever brothers, and Fannie Mae under.

How do Mortgage-backed securities work?

Let's paint a scenario to explain what this term means to a layman - Assuming you want to buy a house and would like a certain percentage of the cost to be financed by mortgage or home equity from ABC bank. ABC bank paid the money into your savings account after accepting the terms of payment - you agree to repay the loan (with interest) within a certain period.

To ABC bank, the mortgage loan portfolio (which comprises the principal and interest payment receivable over a set schedule) is an asset which will be treatment under "Loan & Advances" in the statement of financial position.

Read More Details and Full Accounting Treatments Here - http://accountingsoftware.com.ng/mortgage-backed-securities-accounting-entries/