Mortgage-Backed Securities (MBS) are financial products created by bundling together multiple home loans. When homeowners make their monthly mortgage payments, the money is collected and passed on to investors who buy these securities. This allows investors to earn a return based on the mortgage payments, while providing lenders with more funds to issue new loans. Investing in MBS can be appealing because they often offer higher returns than traditional bonds. However, they also come with risks, especially if many homeowners default on their loans. Understanding the balance between risk and reward is crucial for anyone considering investing in Mortgage-Backed Securities.