The introduction of Basel II at the beginning of 2007 and the new Covered Bond Act are leading to changes in the German securitization market for mortgage loans. Credit institutions and investors are increasingly seeking alternatives in the area of mortgage loan securitization. In addition to covered bonds, there is another securitization instrument, Mortgage Backed Securities (MBS). This instrument dominates the American securitization market. While the trend towards Mortgage Backed Securitization is increasing in some European countries, this market is hardly developed in Germany. This study compares MBS with covered bonds and analyzes the potential use of both products in the German securitization market for mortgage loans. It examines whether the American securitization model is a complement or a competitor to covered bonds.