Mortgage Swap

Mortgage Swaps are when one borrower deposits to bank #1 and withdraws from bank #2.

The second borrower deposits to bank #2 and withdraws from bank #1.

Bank #1 gives the first borrower's money to the second borrower.

Bank #2 gives the second borrower's money to the first borrower.

Both banks swap the assets and liabilities and cancel the loans out.

Both banks continue to collect the principle from both borrowers.