Author: Marino, Dennis
Summary
A mortgage pool is established by the commitment of two or more financial institutions of a specified dollar amount to be used for originating mortgages in mature communities which are perceived by participating lenders as questionable risks. A pool presents the opportunity for a number of lenders to make mortgages available in a given area without any one lender incurring substantial exposure on any mortgage. If a loss is incurred on a mortgage which is foreclosed, then the loss is shared by all participants in the pool. Conversely, all profits which are made on mortgages originated through a pool are usually shared by all participants.
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