They bought these home with cash - so no mortgage.
However, just like Collateralized Mortgage Obligations (CMOs) where they securitize the loans - slicing and dicing into rated tranches...the new game is to take the actual home and collateralize it's value - slicing and dicing into rated tranches...where each holder owns a piece of the home.
It's like REIT's on steroids - since they're using Collateralize Rent Obligations (CROs) in a leveraged way.
A house of cards is being built where they buy all the homes and the serfs pay the rent - until it implodes...
They bought these home with cash - so no mortgage.