Credit risk management is the process of finding risk in an investment, whether it be in mortgage-backed security or asset-backed security. Risk is the potential harm that may arise from some present process or from some future event. ... Investment is a term with several closely-related meanings in finance and economics. ... A mortgage-backed security (MBS) is a bond whose cash flows are backed by homeowners mortgage payments. ... Asset-backed securities are bonds backed by a pool of financial assets that cannot easily be traded in their existing form. ...