- The securitized instrument will be more liquid.
- Default risk can be better managed with the underlying transferred to a special purpose vehicle (SPV).
- More tranched products in the market.
- There will be needs for more complete credit risk management. (Prepayment risk treatment can be highly country-specific)
Post-1997, many asian countries had start to use secondary mortgage market, among other measures, to lessen the reliance of the economies on excessive lending, which is one of the key reasons behind the crisis. This was led by Korea and Japan, but many countries had since followed suit.
A good account of MBS can be found in City Research's A Primer on the Secondary Mortgage Market. (There is a downloadable .pdf version)