when an mbs is initially structured the par value given to the pool is called the original face the total outstanding balance at the time of its inception over time this balance is reduced as borrowers make payments on their loans resulting in a lower actual value of the mbs versus the original face value 
an mbs can be tailored for a specific need for instance if an institutional investor made a request for a particular face value in addition to other characteristics the issuer would do its best to match that request because mortgages don t always come in easily rounded numbers especially when investors are looking for a particular borrower profile the targeted original face and the actual original face will likely be a bit different this is referred to as variance usually the variance is fairly minimal such as a 1 million mbs coming in with a 1 010 000 original face original face vs current faceonce borrowers begin to make payments the total outstanding balance owed on the mbs decreases and this value is referred to as the current face value while the original face value remains fixed since it represents the initial value of the total loans outstanding within the mbs the current face value changes over time the mortgage backed security s current face value is in part driven by borrowers making loan payments or paying off their loans early original face and pool factorthe pool factor is a measure of how much of the original loan principal remains and can be calculated by taking the current face and dividing it by the original face value a newly issued mbs will have a pool factor of one at inception meaning the original face will equal the current face if 50 of the mortgages have been paid down the mbs would have a 0 50 pool factor investors monitor both the current face and the forecasted pool factor of an mbs to determine the predictability of the income stream from the security loans that are being paid down early called prepayments can accelerate the pool factor and reduce the current face value conversely borrowers who are behind on their payments also impact the pool factor and the current face value mortgage backed securities start life with an original face value and a pool factor of one which moves toward zero over time as payments are made on the underlying mortgages 