This means that as banks entered the market to provide cash to property owners and became the servicers of those loans, they were also able to create brand-new markets for securities (such as an MBS or CDO), and profited at every step of the process by collecting costs for each transaction.

By 2006, majority of the biggest monetary firms in the country were involved in the nonconventional MBS market. About 45 percent of the largest firms had a big market share in 3 or four…