Why should the secondary markets for mortgages be split up

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Problem 1: Since 15-year mortgage contracts are way more attractive for homeowners than longer-term contracts such as a 30-year mortgage, the question is: are such contracts riskier for financial institutions and how do they (the financial institutions) complement this increasing demand for 15-year contracts with their risk diversification business strategy.

Problem 2: What contrasts/differences are there between the secondary market activity for mortgages & other capital markets like bonds and stocks for example and why should the secondary markets for mortgages be split up/segmented from the secondary markets for bonds?

Reference no: EM132844091

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