Sharon Crockett on Nostr: nprofile1q…783hh It's called "securitization". Mortgage banks pool the loans on ...

nprofile1qy2hwumn8ghj7un9d3shjtnddaehgu3wwp6kyqpqrd88jzvulm5xfkhqdujmg3ardv6gt3khrh3zxjmd8mzsu8ln00zqx783hh (nprofile…83hh) It's called "securitization". Mortgage banks pool the loans on their books and sell them to a new special-purpose company ("SPC"). The SPC in turn issues bonds in the bond markets backed by the pool of mortgages. P&I (principal & interest) payments on the pool of loans go towards bond investors' interest & principal repayments. Meanwhile, a new servicing company typically takes over servicing the pooled loans. So, the original mortgage bank gets taken out up-front from the loan sales.