A special purpose vehicle (SPV) with securitization payments in the form of different tranches. Financial institutions back this security with receivables from loans.Banks throughout the world are increasingly utilizing a new asset securitization structure known as a "collateralized loan obligation", or "CLO", to meet their financial objectives. CLOs enable banks to sell … [Read more...]
Collateralized Bond Obligation – CBO
Collateralized debt obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. CDOs securities are split into different risk classes, or tranches, whereby "senior" tranches are considered the safest securities. Interest and principal payments are made in order of seniority, so … [Read more...]
What is an Equity Loan?
Equity Loan Equity loans are made available to homeowners who have a low loan balance to value ratio in their home and desire to utilize this ratio to receive cash. This funding program is tax free because the money derived from equity is not considered income, as the homeowner has received that amount by paying down the mortgage. An equity loan can be dispersed in one lump … [Read more...]