I am in the process of having to learn the Hedge Fund and CDO market at an alarmingly fast rate. I think I have got the basics of how bonds and securities are repackaged and sold on to investor. But one thing that I can't find an answer to is this....

When a bond is created, say for example Mortgage-backed-securities, obviously the cash flows are sold to whoever buys the bond. What I can't understand is how does the creator/seller of the bond make money if he has just sold the cash flow rights?

The only way I can fathom how both parties are benefiting from this system is if the interest component of the cash flow from the mortgage is split between the investor and the bond creator?

Is this right or am I totally confused?