What is a Mortgage Pool?

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March 14, 2023

Investing can be complex and intimidating, especially if you do not understand the different elements associated with certain options. If you have ever wondered if a Mortgage Investment Corporation would be a suitable option for your investing needs and goals, you will first need to understand what a mortgage pool is. That is why the mortgage investment experts at PHL Financial have put together an overview of mortgage pools to help investors understand what they are and how they can be utilized as an effective investment tool and alternative lending source.

Learn how to choose the right mortgage investment corporation.

An Overview of Mortgage Pools

A mortgage pool is a collection of residential, commercial, and industrial mortgages that have been grouped together to provide an investment opportunity for individuals that wish to invest in mortgages without needing to own a physical property. This collection of mortgages can also be used to provide funding for individuals who may not be approved through usual methods such as banks. In short, a mortgage pool is a collection of mortgages that can be used as investing tool or an alternative method to obtain financing for a home or commercial property.

Mortgage pools can be comprised of various types of residential or commercial mortgages and are backed by different types of collateral, such as real estate properties. A healthy mortgage pool will feature a variety of first and second mortgages for single-family dwellings, duplexes, townhomes, condo units, bare land, multiple-family dwellings such as apartment buildings, and properties that are currently under construction. This diversification is crucial for mitigating risk and increasing the chance of providing steady returns for investors.

Who Manages a Mortgage Pool?

Mortgage pools are complex and require proper management by a group of professionals that understand their intricacies. That is why most mortgage pools are managed by a Mortgage Investment Corporation (MIC). The MIC is responsible for managing the many mortgages within the pool, collecting payments from borrowers, and distributing cash flow or dividends to investors. To invest in a mortgage pool—also commonly referred to as a mortgage fund—, you will need to speak to a reputable MIC and determine if they are the right fit for your preferences and investment goals. While there will always be some risks for every type of investment, the right MIC will utilize every method they can to mitigate these risks and provide peace of mind for their investors.

To learn more about our investing solutions, funds, or the advantages of investing with PHL Financial Group, get in touch with our team. We can be reached by phone at 604-579-0849 or through our online contact form and will be happy to answer any questions you may have.