In securitization,a pool of high risk loans is assembled and insured by the federal government so that homeowners who are having financial difficulties do not lose their homes.

Question

Quizplus · Accepted Answer

This statement is incorrect. Securitization involves pooling together financial assets, such as loans, and creating securities that are sold to investors. The federal government typically does not insure these securities, although in some cases, certain government entities may guarantee or provide support for them. The purpose of securitization is typically to spread risk among investors, rather than to assist struggling homeowners directly.

In Securitization,a Pool of High Risk Loans Is Assembled and Insured