The success of mortgage-backed securities over the past three decades demonstrate that a financial institution can more easily take some of the loans it has made and use them as collateral for borrowing money through the sale of securities.

Question

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Mortgage-backed securities (MBS) allow financial institutions to pool mortgages and sell them as financial products to investors, effectively using these loans as collateral to raise funds. This process has been a significant part of the financial landscape for decades, facilitating the flow of capital and providing liquidity to the mortgage market.

The Success of Mortgage-Backed Securities Over the Past Three Decades