Dictionary of Banking Terms: payment delay
payment delay
time delay between the date on which borrowers make their mortgage payments and the date principal and interest payments pass through to investors in mortgage-backed certificates. Because interest is calculated monthly, payment delays result in interest- free delay periods of up to 19 days on Ginnie Mae pass-through securities, 24 days on Fannie Mae participation certificates, and 44 days on Freddie Mac participation certificates, reflecting the actual number of days between payment on the underlying mortgages and payment to the pool investors.
