The world of finance is a bit more complicated, but not much. How can a package of loans be worth more than the sum of their individual values? The amount borrowers pay is just the same even if you call the loans an asset-backed security or a collateralised debt obligation.
Securitisation in lending may add value by allowing the risk characteristics of the new instrument to be precisely tailored to the risk characteristics sought by the buyer. This account was espoused by many academics, especially those in love with the efficient market hypothesis. Not many people in the financial services industry felt the need to offer a social rationale for activities that were so obviously profitable. But if they did, it was the same story: such packaging and repackaging led to more efficient risk allocation.
There is something in that argument. But could there be tens of billions of dollars a year of profit in it? Could the advantages of slightly more elaborate differentiation of an already wide range of fixed-interest products really be so large? If differences in risk appetite determined the market, you would not expect the list of institutions that bought securitised products to be so similar to the list that sold them.