A private-label MBS deal is issued consisting one senior class and one subordinate class. Investors can choose to buy either class. If a borrower in the underlying mortgage pool defaults, which group of investors will take the loss first?

Question 21 options:

	Investors who do not buy default insurance from Fannie Mae or Freddie Mac
	Investors who buy the subordinate class
	Investors who do not have rating from rating agencies
	Investors who buy the senior class