What are mortgage-backed securities?

^1. "Mortgage-backed securities are created through a complex process known as 'securitization.' [Citation.] In simplified terms, 'securitization' is the process where (1) many loans are bundled together and transferred to a passive entity, such as a trust, and (2) the trust holds the loans and issues investment securities that are repaid from the mortgage payments made on the loans. [Citation.] Hence, the securities issued by the trust are 'mortgage-backed.' " (Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1082, fn. 1.)