What type of investments provide periodic payments by being backed by mortgage loans?

Mortgage-backed securities are investment instruments that are specifically created by pooling together a collection of mortgage loans. These securities are backed by the cash flows generated from the mortgage payments made by the borrowers. When homeowners make their mortgage payments, a portion of those payments is distributed to the investors who hold the mortgage-backed securities. This structure allows investors to receive periodic payments, typically in the form of interest and principal repayments, reflecting the income generated from the underlying mortgages.

In contrast, stocks represent ownership in a company and do not provide guaranteed periodic payments, while bonds are debt securities that pay interest but are not linked to mortgage loans specifically. Commodities are physical goods traded in markets and do not generate cash flows through periodic payments like mortgage-backed securities do. Thus, the nature of mortgage-backed securities directly corresponds to the question's focus on investments that provide payments backed by mortgage loans.