There are many reasons for mortgage originators to finance their activities by issuing mortgage-backed securities.

Allow mortgage originators to replenish their funds, which can then be used for additional origination activities.

Default or credit risk was passed from mortgage originators to investors using various types of financial innovation.

There can be confusion between real estate settlement companies and mortgage originators.

In general, the mortgage originator can only receive payment from the consumer, except as provided in rules that may be established by the Board.

Additionally, the mortgage originator must verify the consumer's ability to pay.

"A shakeout has begun, but competition right now is still really keen among mortgage originators."

It also aims to reduce the regulatory burden by giving mortgage originators a clearer, less complicated form with which to work.

This is due primarily to the inability of most mortgage originators to sell or otherwise deliver large loans to investors.

Creating a market to which mortgage originators can sell their loans encourages them to lend more.