Securitization and MBS Flashcards by Yanis Guessoum

Q

SPE

A

Entity holding assets backing securities

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Q

ABS

A

Backed by asset pool

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Q

Servicer

A

Collects payments

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Q

Pass-through security

A

Pro rata cash flow distribution

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Q

Tranching

A

Different priority claims

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Q

Waterfall structure

A

Order of payments

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Q

Credit enhancement

A

Improves credit quality

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Q

Covered bond

A

Assets remain on issuer balance sheet

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Q

CDO

A

Backed by loans/bonds/MBS

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Q

CLO

A

Backed by leveraged loans

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Q

Commercial MBS

A

Backed by income property

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Q

Agency MBS

A

Government-backed

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Q

Non-agency MBS

A

Private, higher risk

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Q

Prepayment risk

A

Early principal return

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Q

Extension risk

A

Delayed principal return

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