Which of the following is true about mortgage-backed securities? I) They aggregate individual home mortgages into homogeneous pools.
II) The purchaser receives monthly interest and principal payments received from payments made on the pool.
III) The banks that originated the mortgages maintain ownership of them.
IV) The banks that originated the mortgages may continue to service them.
A)II, III, and IV
B)I, II, and IV
C)II and IV
D)I, III, and IV

Question

Quizplus · Accepted Answer

I) Mortgage-backed securities aggregate individual home mortgages into homogeneous pools. 
II) The purchaser receives monthly interest and principal payments received from payments made on the pool. 
IV) The banks that originated the mortgages may continue to service them.

Option III is incorrect as the banks that originated the mortgages do not maintain ownership of them once they are securitized and sold to investors.

Which of the Following Is True About Mortgage-Backed Securities? I)