Risk Retention | Dodd-Frank Wall Street Reform Act

risk retention(US) The retention of a part of a risk, usually by ‘self-insurance’, of all or part of a potential business loss. As a rule, risk retention represents a contingent liability against which a company should set aside a reserve fund. In particular, a requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. A “securitizer” of an asset-backed security (ABS) continues to accept part of the credit risk of any loss that might occur during the life of the … [Read more...]

Mortgage Backed Securities | Securitization of Mortgage Loans

Mortgage Backed Securities are Investment instruments or debt securities that represents an undivided ownership interest in a group of mortgages. A pool of mortgages that are used as collateral for the issuance of securities in a secondary market. The security granted to the investor may provide that the loan is repaid by principal payments received from the underlying mortgages—‘pass-through’ securities, i.e. the security or obligation represents an undivided interest in the loans secured … [Read more...]