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1
|
A
lender gets money from a number of sources and makes it available
for lending. |
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2
|
A
borrower walks into the lender's office and gets a mortgage
loan. |
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|
3 |
The
lender takes that loan and sells it to Fannie Mae or Freddie
Mac. |
|
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4 |
Fannie
Mae or Freddie Mac bundles that loan with others and sells
the package to an investment bank as a security. |
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|
5 |
The
investment bank sells the security to an investor, who wants
to add it to a portfolio, perhaps a mutual or pension fund. |
|
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6 |
The
borrower who took out the original mortgage buys a mutual
fund to save for retirement... |
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|
7 |
and
voila, the same borrower ends up with a piece of
the original loan. |
