Question: Why have FIs been very active in loan securitization issuance
Why have FIs been very active in loan securitization issuance of pass-through securities while they have reduced their volume of loan sales? Under what circumstances would you expect loan sales to dominate loan securitization?
Answer to relevant QuestionsWhat is meant by denomination intermediation?What is the difference between loans sold with recourse and without recourse from the perspective of both sellers and buyers?Who are the buyers and sellers of U.S. loans? Why do they participate in this activity?How do FIs use securitization to manage their interest rate, credit, and liquidity risks?Consider $ 100 million of 30-year mortgages with a coupon of 5 percent per year paid quarterly. a. What is the quarterly mortgage payment? b. What are the interest and principal repayments over the first year of life of the ...
Post your question