The following statement was made in a special report, “Commercial Mortgage Special Report” (September 19, 2005, p. 2), by FitchRatings: “Defeasance of a loan in a CMBS transaction is a positive credit event.” Explain why.
Answer to relevant QuestionsIn an article by Matt Hudgines “More CMBS Borrowers Pay off Balloon Mortgages on Time,” posted on August 18, 2010, the following appeared “Some 49.9% of the securitized loans that matured in July successfully met their ...What is the limitation of a third-party guarantee as a form of credit enhancement? Why would an interest rate derivative be using in a securitization structure? In a securitization, what is the difference between a servicer and a special purpose vehicle? Why is it difficult for the stock price to follow theNAV of an active ETF?
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