The securitization of mortgages
by admin on 02/12/08 at 7:53 pm
The securitization of mortgages is a financial transaction through which the bank sells to a company specialize in their mortgages.
The company is called special purpose vehicle and through the guarantee of these loans with the bank, issue of securities in the financial market.
The operation is completely transparent and they may not create problems to the customer of the bank. The fact borrowed must refer to the bank to pay his debt, not changing anything.
I must point out a very important clause:
Securitization is an assignment without recourse, that is, there is no guarantee the solvency of the debtor transferred and the risks borne by the holders of securities
Leave a Comment