Securitization

Securitization is the financial-engineering process of packaging individual loans into a pool and selling tradable securities backed by the pool's cash flows. In U.S. mortgage markets, securitization is what allows lenders to keep originating new loans without tying up their balance sheets.

Most conforming mortgages are securitized through agency MBS programs run by Fannie Mae, Freddie Mac, or Ginnie Mae. Non-conforming and non-QM loans are sometimes securitized through private-label MBS or held on the originator's balance sheet.

Why it matters for Milo customers

Milo's crypto-backed mortgages aren't currently securitized — the secondary market doesn't yet have standard tranching for crypto-collateralized residential debt. Milo holds these loans on its own balance sheet (portfolio lender model), which is what gives Milo flexibility to underwrite on crypto in the first place.

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