This market subsidy is a formidable advantage in our  1  Under securitization, mortgages are bundled into pools and then turned into securities that can be easily bought and sold alongside other debt securities.
Combining a diversified pool of home mortgages into a single package in this way reduces the sum of the risks associated with the individual mortgages and enables the packager to sell claims against the package that pay interest rates below the average yield of the package as a whole.