The development of secondary mortgage market activities such as portfolio sales and mortgage securitisation attests to the increasingly sophisticated character of housing finance in developed economies. In the US, where mortgage securitisation is well established, the mortgage-backed securities (MBS) market is currently valued in excess of US$1000 billion. Elsewhere, mortgage securitisation is emerging within the context of a variety of regulatory frameworks and institutional settings. This paper reviews international trends in mortgage securitisation and then examines, via a case study of New Zealand, the consequences of a problem securitisation for institutions, the state and individual mortgagors. It is argued that as MBS markets evolve the needs of investors and credit agencies are likely to impact upon home owners housing experiences. Consequently, there is a need for housing policy to take cognisance of secondary mortgage market developments. A glossary of terms is provided in an Appendix.