Packaging and selling debt have been around WELL before the '99 reform act.

What made these "securities" packages sellable, was the high percentage of FNMA mortgages within the package.

It was asssumed by qualified investors that FNMA had performed their due diligence, ergo a worthy investment.

Sadly, fannie and freddy were being run by entities that, although given hundred million dollar bonuses, simply weren't the sharpest knives in the drawer.

A blind monkey would have done a far better job of running those quasi-agencies.