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| Keywords: Borrowing Under a Securitization Structure.png Borrowing Under a Securitization Structure US Federal Deposit Insurance Corporation http //www fdic gov/news/news/speeches/archives/2007/chairman/spapr1707 html 2007-04-17 Sheila C Bair Chairman The securitization structure diagram shows the components of a typical securitization It is important to note that not all securitizations are identical Nevertheless the diagram generally illustrates the roles of the various participants in a securitization structure the key elements to a typical securitization include the following Issuer - A bankruptcy-remote special purpose entity SPE formed to facilitate a securitization and to issue securities to investors Lender - An entity that underwrites and funds loans that are eventually sold to the SPE for inclusion in the securitization Lenders are compensated by cash for the purchase of the loan and by fees In some cases the lender might contract with mortgage brokers Lenders can be banks or non-banks Mortgage Broker - Acts as a facilitator between a borrower and the lender The mortgage broker receives fee income upon the loan's closing Servicer- The entity responsible for collecting loan payments from borrowers and for remitting these payments to the issuer for distribution to the investors The servicer is typically compensated with fees based on the volume of loans serviced The servicer is generally obligated to maximize the payments from the borrowers to the issuer and is responsible for handling delinquent loans and foreclosures Investors - The purchasers of the various securities issued by a securitization Investors provide funding for the loans and assume varying degrees of credit risk based on the terms of the securities they purchase Rating Agency - Assigns initial ratings to the various securities issued by the issuer and updates these ratings based on subsequent performance and perceived risk Rating agency criteria influence the initial structure of the securities Trustee - A third party appointed to represent the investors' interests in a securitization The trustee ensures that the securitization operates as set forth in the securitization documents which may include determinations about the servicer's compliance with established servicing criteria Underwriter - Administers the issuance of the securities to investors Credit Enhancement Provider - Securitization transactions may include credit enhancement designed to decrease the credit risk of the structure provided by an independent third party in the form of letters of credit or guarantees PD-USGov Structure_diagrams Mortgages Original upload log wikitable - - 2008-02-06 00 48 52 606 × 526 16685 bytes Halgin <nowiki> Borrowing Under a Securitization Structure US Federal Deposit Insurance Corporation http //www fdic gov/news/news/speeches/archives/2007/chairman/spapr1707 html April 17 2007 Sheila C Bair Chairman </nowiki> | ||||
