"The Federal Reserve Bank of New York met with interested stakeholders recently to address legal questions in the framework for mortgage note transactions.
With the growth in securitization, lenders adjusted business models. Major banks were no longer originating mortgage loans to hold, rather they were writing loans to sell them. Both the note and the mortgage would be sold through the securitization process. The note, according to the N.Y. Fed, is evidence of a promise to repay, and the mortgage securing the loan was often transferred more than once.
Ultimately, the loan and the mortgage end up being owned by an entity created for the purpose of owning many loans with their mortgages, known as pooling. And that entity would then issue rights, or securities, to this pool to investors. These investors would then collect a stream of payments from this pool".......................LINK
No comments:
Post a Comment