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Your Home Mortgage. How unseen investors generate funds to keep home loans flowing

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IN the home-buying business, there's an event called ``the passing.'' The phrase is often said with such a solemn air that it sounds like more than just a passing, but a rite of passage. For someone buying a first home, it is, because this is where the biggest financial event in many families' lives takes place.

With mortgage rates between 10 and 11 percent in most of the United States, this ceremony has been taking place more and more often. But even though the pace of lending has become hectic, each step of the passing must follow the rules of law and tradition.

At a lawyer's office, bank conference room, or mortgage company office, the buyer, seller, attorneys, loan officer, and real estate agents gather to sign and pass around all the legal documents that transfer the property to the new owners and commit them to years of monthly mortgage payments.

Also on this day -- or shortly afterward -- the lender begins looking for a way to ``sell'' that brand-new mortgage to outside investors so that the next time a happily nervous couple comes along, money will be available to lend to them.

By the time the passing arrives, home buyers are all too familiar with the steps that led to it, beginning months earlier when they first thought about a new house. It may have started when they picked a neighborhoood or town where they wanted to live. Then, probably with the help of a real estate agent, they found the house of their dreams -- and maybe the price of their nightmares.

This was followed by negotiations over the price, an offer to buy the house, signing the purchase and sales agreement, making a formal loan application, and getting the house inspected. Behind the scenes, the lender was doing a credit check on the prospective buyers, looking into their employment histories, sources of income, debt, savings, and other financial obligations.

Finally, all of those steps led to this important day.

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