Private mortgage
lenders are individuals or groups who accept mortgage applications and are willing to take on more
risky investments because they are not governed
by the same laws as institutional
lenders.
By separating out mortgage securitization as a government function and mortgage origination as the province of private lenders, the system helps avoid perverse incentives by the mortgage securitization entity to make excessively risky loans to feed the creation of securitie
By separating out mortgage securitization as a government function and mortgage origination as the province of
private lenders, the system helps avoid perverse incentives
by the mortgage securitization entity to make excessively risky loans to feed the creation of securitie
by the mortgage securitization entity to make excessively
risky loans to feed the creation of securities.