That's true in that it's what securitization is meant to be but unfortunately as was seen in the mid-2000's it proved extremely difficult to accurately price th

That's true in that it's what securitization is meant to be but unfortunately as was seen in the mid-2000's it proved extremely difficult to accurately price the little balls of risk and the money being made in doing the selling and breaking apart those balls provided an incentive for people to keep the pipeline of loans going well past what was prudent. In the UK we ended up with all sort of shenanigans like "self-certified mortgages" where the person taking out the loan was allowed to certify their ability to repay. with that kind of product it's very difficult to classify risk of non-repayment as you can't believe the evidence provided (necessarily).