Daily Kos: Victim of Real Estate Bust: Your Pension - Part 1

by gjohnsit

Fri Mar 23, 2007 at 02:38:46 PM PDT

It's the dirty little secret of Wall Street.

"U.S. lenders will make about $2.8 trillion in home-mortgage loans this year, according to the Mortgage Bankers Association. The MBA estimates that about 80% of these loans will end up in mortgage-backed securities. Mortgage-backed securities outstanding at the end of the first quarter totaled $4.61 trillion, up 61% since the end of 2000. In the same period, total Treasury securities outstanding grew 35% to $4.54 trillion.

Who buys those mortgage-backed securities? Pension funds have been one of the largest buyers for many years now.