Its weirder than you think. No banks have owned loans for a very long time. They're resold to various quasi government-ish organizations (think, like the IRS

Its weirder than you think. No banks have owned loans for a very long time. They're resold to various quasi government-ish organizations (think, like the IRS or the federal reserve, although not the IRS) in exchange for cash raised by selling mortgage backed security bonds. All kinds of random individual and orgs own those bonds. They pay off pretty well almost a sure thing when the first derivative of interest rates is negative, not so well at zero to positive. Banks and mortgage brokers act as commissioned sales forces for the MBS bond market, basically.