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What is the main benefit of a Mortgage clause for the mortgagee?

User LiveSource
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Final answer:

The main benefit of a Mortgage clause for the mortgagee is the ability to avoid exposure to local financial risks by diversifying their loan portfolio.

Step-by-step explanation:

One of the main benefits of a Mortgage clause for the mortgagee is the ability to avoid exposure to local financial risks. When a bank sells its local loans and buys a mortgage-backed security based on home loans from different parts of the country, it diversifies its loan portfolio. This diversification helps in mitigating the financial risk associated with a decline in the local economy, as the mortgagee's investments are spread across various regions.

User Pergy
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