1. Suppose financial intermediaries did not exist and only direct finance was possible. How would this affect the process of an individual buying a car or a house?

2. During the 2007-2009 recession, many people who had taken out mortgages to buy homes found that they were having trouble making the payments on their mortgage. Because housing prices were falling, many found that the amount they owed on their mortgage was greater than the price of their home. Significant numbers of people defaulted on their mortgages. The following appeared in an article discussing this issue in the Economist magazine:

Since foreclosures are costly for lenders as well as painful for borrowers, both sides could be better off by renegotiating a mortgage. The sticking-point, according to conventional wisdom, is securitization. When mortgages are sliced into numerous pieces it is far harder to get lenders to agree on changing their terms.

Why might both lenders and borrowers be better off as a result of renegotiating a mortgage? How does securitization result in mortgages being "sliced into numerous pieces"? Why would securitization make renegotiating a loan more difficult? How would these difficulties affect the services that securitization provides to savers and borrowers?