All Definitions »Pass Through Certificate

Pass Through Certificate Meaning & Definition

Pass Rate

Over 25 years and 400,000 exams

Assured Success

If you use our practice exams

Chat & Call Support

We are with you every step of the way

Definition of Pass Through Certificate

Pass Through Certificate is a security that passes through income and principal payments made to an underlying portfolio of mortgages. GNMA is one of the biggest issuers of this type of security.

Applying "Pass Through Certificate" to Securities Exams:

When banks make mortgage loans to homeowners the banks will often sell those mortgages as part of a pool of mortgages to Ginnie Mae, Fannie Mae and Freddie Mac. This agencies will in turn sell off interest in the mortgage pools to investors through the issuance of pass through certificates. Investors in the pass through certificates will receive monthly payments that are based on the monthly mortgage payments made by homeowners.

Choose Your Exam