Such as for instance securitization, the newest issuance off safeguarded securities transforms illiquid mortgage loans into the a funding source for the lending company
Secure bonds is ties given of the finance companies and you can collateralized from the good devoted pool off mortgages, referred to as safeguards pond. Unlike securitized mortgage loans which can be taken out of the new bank’s balance layer, brand new mortgage loans from the safeguards pond stick to the bill piece, additionally the financial must hold financial support facing prospective losses identical to every other home loan. Read more “Such as for instance securitization, the newest issuance off safeguarded securities transforms illiquid mortgage loans into the a funding source for the lending company”
