[Verse 1]
Banks make loans to people every day
Mortgages and credit cards they say
But holding all these loans can be a strain
So they found a clever way to share the pain
They gather up these loans in one big pool
Transform them into something new and cool
[Chorus]
Securitization, it's the transformation nation
Pool and package, repack and manage
Turn the loans into securities that trade
That's how the magic of securitization's made
Pool, package, sell away
That's the securitization way
[Verse 2]
Why do banks want to do this thing?
Well let me tell you what benefits it brings
First they get their money back today
Don't have to wait for borrowers to pay
More capital means more loans they can make
And spread the risk for everybody's sake
[Chorus]
Securitization, it's the transformation nation
Pool and package, repack and manage
Turn the loans into securities that trade
That's how the magic of securitization's made
Pool, package, sell away
That's the securitization way
[Bridge]
From the bank's books to the market floor
Individual loans become something more
Investors buy these packaged deals
Diversified risk is how it feels
Mortgage-backed securities are born this way
Credit card debt gets packaged every day
[Verse 3]
The process starts with origination
Banks create loans across the nation
Then they pool these assets all together
Through good times and stormy weather
Special purpose vehicles hold them tight
Before they're sold to investors' sight
[Chorus]
Securitization, it's the transformation nation
Pool and package, repack and manage
Turn the loans into securities that trade
That's how the magic of securitization's made
Pool, package, sell away
That's the securitization way
[Outro]
So remember when you see those mortgage bonds
They started life as loans beyond
Securitization made the change
From single loans to market range
Pool, package, sell away
That's the securitization way