The practice of bundling mortgages or other types of loans into pools and selling pieces of the pool as bond-like instruments to investors is known as

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Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations and selling their related cash flows to third-party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations. This process can diversify lending risk and increase liquidity in the financial markets.

The Practice of Bundling Mortgages or Other Types of Loans