Derivatives are mostly cover for mortgages made to unworthy debtors.
It’s a way to sell them to the ignorant buyer.
Affirmative action in mortgages has caused numerous crashes, and will continue to do so as long as Congress advocates for them.
The way I understand it is that a lender, who has son bad debt, sells portion of that bad debt fish wrapped in, “good” debt, in hopes the good debt pays off and the buyer makes son money.
It’s just a way for a bank or finance company to reduce its exposure to debt with high risks.