Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities.
This process enables credit originators to
See Also
Securitize: What It Means, How It Works, Pros and ConsCovered Bonds vs SecuritisationAdvantages and disadvantages of raising finance through asset securitisationSecuritization: Definition, Meaning, Types, and Example- Transfer some of the risks of ownership to parties more willing or able to manage them,
- Access broader funding sources at more favorable rates,
- Save some of the costs of on-balance-sheet financing, and
- Manage potential asset-liability mismatches and credit concentrations.
Learn More
Asset Securitization (Comptroller's Handbook, November 1997)
Covers a bank's use of asset securitization as a way to generate funds, manage the balance sheet, and generate income
References
- Accounting and Reporting for Mortgage Loan Commitments (OCC 2005-18, May 2005); Interagency Advisory
Covers accounting and reporting for mortgage loans held for resale or sold under mandatory delivery and best efforts contracts - Asset Securitization Activities (OCC 1999-46, March 2010); Interagency Statement
Addresses weaknesses in the asset securitization practices of some insured depository institutions including inadequate controls and liquidity risk - Capital Treatment for FAS 166 and FAS 167 (ASC 860 & 810) (OCC 2010-5, February 2010); Final Rule
Covers modification of the treatment of certain structured finance transactions involving a variable interest entity - Complex Structured Finance Transactions (OCC 2007-1, January 2007); Interagency Statement
Covers examples of complex structured financial transactions that often pose elevated risks to financial institutions - Covenants Tied to Supervisory Actions in Securitization Documents (OCC 2002-21, May 2002); Interagency Advisory
Addresses the safety and soundness implications of certain covenants included in securitization documents - Implicit Recourse in Asset Securitization: Policy Implementation (OCC 2002-20, March 2010); Interagency Guidance
Highlights several examples of post sale actions taken by institutions with respect to securitized assets - Mortgage Banking: Interagency Advisory on Mortgage Banking (OCC 2003-9, February 2003); Interagency Advisory
Provides guidance regarding mortgage-banking activities, primarily in the valuation and hedging of mortgage-servicing assets
