When issuing mortgage-backed bonds,the issuer transfers ownership of the underlying mortgage to the investors/bondholders.

Question

Quizplus · Accepted Answer

In issuing mortgage-backed bonds, the issuer does not transfer ownership of the underlying mortgages to the investors/bondholders; instead, they pool the mortgages and sell securities representing claims against the cash flows or payments generated by the pool.

When Issuing Mortgage-Backed Bonds,the Issuer Transfers Ownership of the Underlying