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IFM10 Ch01 WebExt 1A

IFM10 Ch01 WebExt 1A - Chapter1 WebExtension1A Welfare 1 2...

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  1 Chapter 1 Web Extension 1A A Closer Look at Markets:  Securitization and Social  Welfare  
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  2 Topics in Web Extension The home mortgage industry Securitization in the mortgage industry
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  3 Home Mortgages Before S&Ls The problems if an individual investor tried to  lend money to an aspiring homeowner: Individual investor might not have enough money  to fund an entire home Individual investor might not be in a good position  to evaluate the risk of the potential homeowner Individual investor might have difficulty collecting  mortgage payments
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  4 S&Ls Before Securitization Savings and loan associations (S&Ls)  solved the problems faced by individual  investors S&Ls pooled deposits from many investors S&Ls developed expertise in evaluating the  risk of borrowers S&Ls had legal resources to collect  payments from borrowers
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