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The Securitization Markets Handbook: Structures and Dynamics of Mortgage-and Asset-Backed Securities by Anne Zissu, Charles Austin Stone

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Chapter One
Mortgage-Backed Securities
IN THE UNITED STATES mortgage-backed securities (MBSs), created by securitizing mortgages, form the core of the secondary mortgage market. Securitization, the process of pooling loans and converting them into packages of securities, integrates the banking market with the securities markets.
The process occurs as follows. Financial institutions (originators) sell pools of mortgages to government-sponsored enterprises (GSEs)—the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac), the Federal National Mortgage Association (FNMA, or Fannie Mae), or the Government National Mortgage Association (GNMA, or Ginnie Mae)—for cash or in exchange for MBSs, or they sell pools of mortgages for cash to private-conduit-type ...

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