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#1 is less risky, since mortgages have to be collateralized. #1 is also less volatile

• pdonis 5y ago
  > #1 is less risky, since mortgages have to be collateralized. Less risky, yes. Less risky to the tune of 5 or more percentage points? Not so sure. > #1 is also less volatile That depends on the housing market, which can be subject to large fluctuations that have nothing to do with the underlying value of the assets and everything to do with the availability of newly printed money for mortgage loans. The years leading up to and including the 2008 crash showed how volatile a manipulated housing market can be.