We used to see only virtues in having loans packaged and resold to third parties, but now there are critiques:1. It is harder (impossible?) to renegotiate loan terms if something goes wrong (this is from Brad DeLong, and Paul Krugman today).
2. The loan holder no longer has market-stabilizing, special information about the value of the loan (see Avinash Persaud in yesterday's FT). This decreases the likelihood of anyone "supporting the market" and holding or buying up the assets in hard times.