When a mortgage lender makes funds available to a borrower, the debt is secured on the borrower's home, which can be seized later and sold should things go wrong. By extension, the mortgage itself can be securitised.
This involves the lender grouping say £100m of existing mortgages together- remember that a mortgage simply represents income received over say 25 years - and then creating and selling £100m bonds (IOUs) to willing investors.
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