The originate-to-distribute business model is when ________.
A) mortgage originators made sure that the mortgage was a good credit risk
B) mortgage originators distributed the mortgage to an investor as an underlying asset in a security
C) homeowners could refinance their houses with larger loans when their homes appreciated in value
D) mortgage originators were the credit rating agencies

Question

Quizplus · Accepted Answer

The originate-to-distribute business model is when mortgage originators sell the mortgages they have originated to investors as an underlying asset in a security. This allowed mortgage originators to transfer the credit risk to investors and earn fees on the origination process.

The Originate-To-Distribute Business Model Is When ________