Sure, but the "value" of the mortgage is supposed to be that it represents twice (usually way more) of value in interest payments that the Debtor will pay over

Sure, but the "value" of the mortgage is supposed to be that it represents twice (usually way more) of value in interest payments that the Debtor will pay over the life time. So why is the bank selling it for sometimes half of what the Debtor owes then on a fire sale scenario where the holder is having issues? One of the big problems that happens a lot with mortgages is that the bank sells it to this other bank and mix ups can cause all kind of problems for the debt holder. Give the debtor right of first refusal at price they are about to sell (simple form letter that they have 30 days to respond to). 9 times out of 10, debtor just lets it happen. But what WILL happen is a company will come along, offer what are basically refinance loans to service this situation, and the debtor gets helped out. The whole practice of tranching is toxic to begin with and if this discourages that its a double win.