What is the meaning of Mortgage-backed security?

These bonds are backed by real estate mortgages and are guaranteed by a government agency such as the Government National Mortgage Association (GNMA) or backed by publicly held corporations such as the Federal National Mortgage Association (FNMA). These securities are described as self-amortizing because your earnings are part interest and part repayment of principal on the underlying mortgages. You can buy individual securities (often at a minimum of $25, 000) or buy mutual funds that invest in mortgage-backed securities.