Mortgage-backed securities lost their value when:
A)the underlying assets lost their value.
B)borrowers (the mortgagees)walked away without a real obligation to repay.
C)mortgage originators went bankrupt.
D)a and b
E)b and c

Question

Quizplus · Accepted Answer

Mortgage-backed securities lost their value primarily when the underlying assets (the homes) lost their value and when borrowers walked away from their mortgages, often because they owed more than the homes were worth. Both of these factors directly impacted the value of the securities backed by these mortgages.

Mortgage-Backed Securities Lost Their Value When