Since mortgage backed securities are loans that backed by stream of income from mortages which is also considered as a type of asset, why do we need to differentiate between mortgage backed securties and asset backed securities? Aren’t they the same? Maybe there are some exceptions but it is just like subgroups like credit card backed mortagage or car loan mortgage etc… Why are they really 2 distinct types of asset classes?
If you want to think of MBSs as a subset ot ABSs there’s nothing wrong with it, but it’s uncommon enough that you may it more confusing than clarifying.
What advantage do you expect to accrue?
Because MBS have very specific characteristics, behaviors, and are a very large part of the market. ABS is very broad and could even include a security of mortgages on mobile homes, for example. Much different than a MBS in terms of credit quality, behavior, etc.