The loans are packaged into a company and then traded on the stock market. Your loan repayments are the company's "profits". Bonds are created and then sold to

The loans are packaged into a company and then traded on the stock market. Your loan repayments are the company's "profits". Bonds are created and then sold to share holders and you may even have a bond with your own mortgage in it. Depending on the class of bond, you get paid more or less (this is the CDO) The profits are from the bonds on the loan in the stock market.