LASTS How Securitization VAN M. ROSEN PA was Supposed to Work $$ Mortgage Payments Borrower, ss rlegton Mortgage $ MORTGAGE $ from Note 5 BROKER other loans ORIGINATOR SERVICER Borrower Contact No Borrower Contact Mortgage &Note $From Mortgage Loan Purchase & Loans AGGREGATOR/ Sale Agreement (MLPSA) Other ISSUER/SPONSOR Loans | Accumulates Notes ‘Mortgages POOLING & SERVICING AGREEMENT Mortgage g &Note DEPOSITOR RATING INSURANCE AGENCIES ‘COMPANIES: Mortgage Note ‘TRUST (REMIC) @ $2.Billion in Loans Custodial Agreement TRUSTEE Real Estate Mortgage Investment Conduit MBS- Mortgage ‘ so Backed Securities INVESTORS /BONDHOLDERS “Tranches” LEAST — LOWEST % FIRSTTO. RISK OFRETURN GUARANTEE GET PAID fecccccee PDP DDD DD | dich HIGHEST No LASTTO [E FE E & E EE E | Risk OFRETURN GUARANTEE GETPAID [= Further securtized 5 CDOS (Collateralized Debt Obligations) to start the process all over again at Aggregator/Issuer/Sponsor level