Mortgage backed security.

They didn't find some subprime individual that was willing to bid up the house.

You've paid off your mortgage.

Actually a mortgage, a borrower.

The original mortgage is 750,000.

Mortgage department, First National Bank.

I suffered from my mortgage loan.

And we also have a mortgage

I can't pay this mortgage anymore.

Think Enron, Madoff, the mortgage crisis.

You don't pay any mortgage payments.

Of course, the mortgage brokers at

They can't afford a mortgage anymore.

They have no money down, 1 million loan, subprime, negative amortization, they had no credit rating, etc, etc.

My house is a mortgage free house.

I'll have to take a 750,000 mortgage.

I just can't pay this mortgage anymore.

Maybe people aren't getting mortgage loans still.

So what is a mortgage backed security?

The bank holds a mortgage on his building.

So that's what a mortgage backed security is.

So I take out a mortgage for 750,000.

But interest on a mortgage is tax deductible.

Welcome to my presentation on mortgage backed securities.

What percentage of them default on their mortgage?

I got a mortgage. I got car payments.

Maybe they'll buy mortgage backed securities, so it makes the mortgage market a little bit looser, a little bit more liquid.

I have to write that down. or 80,000 mortgage.

So it's not too different than maybe a mortgage.

And you end up with a mortgage backed security.

I have a whole video on mortgage backed securities.

Well I have the original mortgage on my house.

This is actually a mortgage backed collateralized debt obligation.

Let's say you take out a 200,000 mortgage loan.

And they rate these assets, these mortgage backed securities.

But the average house anyone who's traded mortgage bonds will tell you the average mortgage loan has a 10 year expected life.

And as you see, as months go by, when you pay the mortgage note and I show that right here, this mortgage payment.

We create mortgage terms that we can't actually deal with.

CDOs, collateralized debt obligations, are derived from mortgage backed securities.

My mortgage actually might be something like 4,000 a month.

Now let's do the example with a mortgage backed security.

And this is what this mortgage backed security market allows.

And so money came from when the owners of each of these mortgage backed securities each, let's say, paid 1,000 for the mortgage backed securities.

And yes, Toby is married and he does have a mortgage.

It's a chattel mortgage, just like furniture, just like a car.