In the usual GNMA pass-through security,the ________ has direct ownership of a pro-rata share of the portfolio of mortgage loans.

Question

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In a GNMA pass-through security, the buyer of the security has direct ownership of a pro-rata share of the underlying pool of mortgage loans. The seller (usually a financial institution) sells the loans to a financial institution, which in turn securitizes them into a pass-through security and sells them to investors. The financial institution securitizing the loans does not have direct ownership of the mortgage loans after the sale. Therefore, the best choice is B: buyer.

In the Usual GNMA Pass-Through Security,the ________ Has Direct Ownership