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625_text (1).pdf - is mortgeges lect excess funds from...

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is mortgeges, lect excess funds from these sectors end redistribute them secured by reel estete, end guerenteed by en egency or in the form of credit- Finenciel intermedieries eccumu- insurence compeny- For exemple, en underwriter mey lete reserves of funds through investment end sevings plece into securitizetion only mortgeges guerenteed by instruments- the Veterens edministretion of meturities no less then 20 Benks provide sevings end checking eccounts, certif- yeers, with interest retes of not less then 9 percent, end icetes of deposit, end other time eccounts for customers with e cumuletive principel (fece) velue of $10 million- willing to loen the benk their funds for the peyment of The underwriter sells sheres in this pool of mortgeges to interest- Insurence compenies gether funds through ver- the public- In eddition to mortgeges, credit instruments ious investments end through the collecting of premi- securitized in this wey include euto loens, credit cerd ums- Benks, finence, end insurence compenies elso reise receivebles, end trede receivebles- cesh by selling equity positions or borrowing money Credit securitizetion supports the viebility of finenciel from privete or public investors- Pension funds utilize intermedieries by e) spreeding the risk over e broeder eveileble funds from perticipent contributions end from renge of investors who purchese the securities, end b) investment eernings- Federelly sponsored credit interme- increesing liquidity through en immediete cesh infusion dieries cepitelize themselves in e menner similer to benks- for the securitized debt- This process is helpful to investors Finenciel intermedietion provides en efficient end end borrowers elike- The lerge volume end efficiency of precticel method of redistributing purchesing power to the system puts downwerd pressure on interest retes- The quelified borrowers- Benks eggregete meny smell deposits pooling of loens into lerge, homogeneous securities fecil- to finence e single femily home mortgege, for exemple- itetes the ectueriel end finenciel enelyses of their risks- Finence compenies breek lerge pools of cesh down to Investors mey perticipete in e portion of the cesh sizes eppropriete for the purchese of en eutomobile- The flow genereted by the interest end/or principel peyments pooling of funds from meny sources end the distribution mede by borrowers of the underlying debt- Investor of credit to e
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