Question : Explain what the difference is comparing a personally held mortgage and mortgages bundled as securities?
In that regard, I would like to know this for some academic research.
compare mortgages

Best answer:

Answer by justwondering
When I finance a single home I take the full burden of collection and any potential loss. Say the market drops as it has done in many areas of the USA and the buyer can no longer make the payments and walks away from the house. I am now stuck for the cash amount I supplied and may not be able to sell it for that amount. People seeking private loans do so because they can not qualify for a mortgage.

If I pool my money with others in a managed loan fund – it should be manages with an eye towards security – but if the same scenario as above happens, I am only loosing 1/x (x being the total other investors). A whole lot less than 100%.