US MBS Market Segments

This question tests whether you understand how US MBS are structured and how credit risk is allocated between issuers, guarantors, and investors. In interviews, bankers use this kind of question to check that you know the core difference between agency and non agency securitizations, since that distinction affects pricing, yield, and investor protection. It also reinforces the idea that security structure determines who absorbs losses if borrowers default, which is a key concept in capital markets and fixed income discussions.