I have to apologize (personally to @MAHDOOD ) for oversimplifying how mortgage backed security (MBS) “ownership” works. In light of the realization that I oversimplified, I decided to do a deep dive and write a research paper on the US mortgage market and how the US government intervenes in it. TLDR: My main point still stands: government intervention in the ~$13.1T US single family mortgage market is extreme and worth taking note of. ~70.61% ($9.3T) of the mortgage market carries a government-linked, credit-risk guarantee, AKA taxpayers. The Federal Reserve also owns roughly ~15% (~$2T) of the market, whose credit risk is backed by taxpayers (and included in the ~70.61% ($9.3T)). I probably won’t post the whole research paper anywhere, but this high level summary below should give some understanding of how the market works. Questions and corrections welcome. After mortgages are originated, there are two types of entities: owners and guarantors. In the approximately ~$13.1 trillion U.S. single family mortgage market, the typical owner of a mortgage-backed security earns the interest payments and bears interest-rate risk, prepayment/extension risk, and liquidity risk — meaning the asset’s value fluctuates as rates move or borrowers refinance. (Private label MBS and unsecuritized whole loans, ~29% of mortgages (~$3.87T), bear those three risks PLUS credit risk. AKA a free market) The guarantor, by contrast, bears the credit risk — the risk that borrowers default and liquidation does not fully repay principal. ~70.61% ($9.3T) of the mortgage market carries a government-linked, credit-risk guarantee: roughly 50% via Fannie Mae and Freddie Mac (implicit) and about 21% via Ginnie Mae (explicit). The Federal Reserve also owns roughly ~15% ($2T) of the total market. While the Fed holds the interest-rate, prepayment/extension, and liquidity risks on those securities, it does not bear the borrower credit risk. That credit risk is insured by the issuing agencies — either Ginnie Mae (explicit full faith and credit of the U.S. Treasury) or Fannie Mae and Freddie Mac (implicit Treasury backstop through conservatorship). In simple terms, owners absorb market volatility, while the guarantors absorb borrower default losses. 29% remains outside federal credit protection through private-label securities and bank-held whole loans.