Q&A: What is securitization in finance?

Question by aayntu: What is securitization in finance?
I’m learning about securitization in my finance class right now, but I have a weak grasp of what it really is. Can someone please give me a simple definition of securitization and the process of it?

Best answer:

Answer by ldjamieson
It is basically taking a bunch of financial products, packaging them under some form of contract as a new financial product (a security) and selling it. Making a security out of something is securitization.

Add your own answer in the comments!

Has You Mortgage Received A Securitization Audit?? – What IS This??

Has You Mortgage Received A Securitization Audit?? – What IS This?? This audit tracks and traces the line of ownership of you mortgage and should be done if …
Video Rating: 5 / 5

HBN ( www.hbn.cc 323-522-5635) provides service to property owners to protect their legal interests, defend against pretender note holders, and banking entit…

Securitization Guru Justin Ford Partners with Discovery Expert Anthony Martinez and Becomes e-Logic Group’s COO for Advanced Securitization Audit Analysis Services


Miami, Florida (PRWEB) August 21, 2012

As companies continue to offer worthless securitization reports to consumers, e-Logic continues to grow as one of the most dominating and leading providers of an advanced securitization style analysis unmatched by any securitization audit provider. To enhance e-Logic’s position in the market, the company has announced its newest addition, Justin Ford, as its Chief Operating Officer. “Justin not only brings advanced research and knowledgebase to the team, he also brings a refreshing level of enthusiasm, focus and resolve to our entire vision,” says Anthony Martinez, e-Logic’s CEO.

“I’m excited at the opportunity to help enhance the service level e-Logic brings to its client base,” says Mr. Ford. e-Logic is one of the only service providers to create the kind of hybrid securitization analysis reports that attorneys can actually use.” As it stands, a number of companies in the market offer training in securitization research using tools like the Bloomberg Terminal. These “allegedly” trained companies in turn provide reports that while maybe informative, can rarely be used in court because neither the report nor the affidavit accompanying it can pass the required expert witness muster.

“The industry is saturated with bad and useless information. What e-Logic brings to the table is something very different. The Securitization, Discovery Strategies & Tactics Analysis Report(SDST Analysis Report) is exactly what it sounds like. It does more than just identify the securitization chain, it takes that information and incorporates it into a litigation analysis for the attorney reading the report and enables the attorney to understand not only the different methods to approach the case but the pitfalls they may run into,” says Mr. Ford.

This effort is lead by one of the leading complex litigation discovery experts in the litigation market today – Anthony Martinez, e-Logic’s Chief Executive Officer who brings over 16 years of real hands on experience. “Time is money. Attorneys don’t have time to waste on useless resources and they’re not happy to bill their clients for things they cannot use. It not only makes them look bad but it discourages someone in need of legal counsel to defend or prosecute a real property matter. Real property litigation is serious. These attorneys are going up against a trillion dollar machine with only a few thousand dollars. Some may call it stupid – we call it guts! You better believe every dollar needs to be well spent so it’s imperative we provide the sharpest sword – a cutting edge product that gets them to the table to play” says Mr. Martinez.

In today’s market people need to understand there’s much more needed to prevail than just Bloomberg certification and a terminal account. You have to have the prerequisites to qualified as an expert in the courtroom with a judge thats already prejudiced against the homeowner and counsel. According to Mr. Martinez, “You have to be fluent and prepared to justify how a $ 250,000 loan was aggregated into 1.2 billion for ABC Trust 2007-AE1, show how the aggregated amount was converted into a security bond/certificate and distributed over 35 classes (fractionalized). Then you better be prepared to show how of the 35 classes, YOUR subject loan was found in 18 of the classes (fractionalized) and of the 35 classes 28 have been paid off in full leaving 7 with an aggregated value of 1.7 million. You then need to explain how of the 18 YOUR loan was found in, 15 of those classes are part of the 28 paid in full and of the 3 classes where YOUR loan is still fractionalized, the aggregated amount is $ 275,000. That’s just a speck of the kind of valuable and useful information attorneys need in their analysis which gives good cause for an accounting, something attorneys have difficulty obtaining through a normal discovery request.”

About e-Logic Group, Inc. – e-Logic is one of the most advanced e-Discovery Providers in the industry today that uses state of the art technology that incorporates intelligent algorithms and analytics to automate information processing. e-Logic is now a provider of high end Advanced Securitization Audit and Forensic Audit Analysis Reports for attorneys engaged in loan level litigation involving fraud.

About Anthony Martinez- Mr. Martinez is a top Discovery Expert, Consultant and Strategist in the industry today with over 16 years of experience in complex litigation discovery and e-discovery matters. A veteran of the gulf war, Mr. Martinez is currently the President and CEO of e-Logic Group, Inc., Executive Director of Anthony Martinez & Associates, a leading LPO Service Provider and is the Author of Discovery Tactics, a leading Weblog that discusses real property litigation matters, case law and other topics.

About Justin Ford – Mr. Ford is a seasoned securitization specialist and former Principal of Automated Expeditors of America in Detroit, MI – a leading provider of advanced securitization research and audit reports. Mr. Ford has an extensive background in client relationship building, marketing and corporate branding.







Will mortgage securitization pass or fail in the future?

Question by : Will mortgage securitization pass or fail in the future?
Will securitization of mortgages succeed or fail in the future markets? What are some reasons why or why not?

Thanks
I was asking more about the general process of the secondary mortgage market where there is securitization of mortgages. (mortgages are pooled together with hundreds or thousands of others, where investors can they invest in them).
Also, do you have any idea what an IO trigger is? an advantage and disadvantage of an IO trigger? I’m not really sure what it means?

Best answer:

Answer by Immortal
Are you talking about the CMO and CDO where there are various different tranches to invest in?

Yes, that sounds very much like CDO/CMO investment. In that case, I don’t think anyone who knows about the true nature of CDO/CMO would bother to invest in it, and ultimately cause it to cease to exist.

Why?
Because these kind of securitization is used to reallocate all the mortgages’ risks (prepayment risk, default risk, interest rate risk, etc) into several different tranches. Some of the tranches will overcompensate the investors based on lower-than-average risks, while some other tranches will be undercompensated based on higher-than-average risks. The average that I mean refers to the average risks of the whole mortgages included in the securitization.

For a smart investor, he will invest in the tranches that overcompensate him. In other words, he was supposed to get average return at average risk if there was no segregation of mortgages by tranches, but because there’s segregation based on tranches, this smart investor will buy the tranches that give him higher return at average risk, or average return at lower risk.

That will leave out the other tranches that undercompensate any investors stupid enough not to realize they are being undercompensated. So these investors will take the most brunt in case of defaults. Even though these tranches are undercompensating, those who package the securitization can make them look very attractive to attract ignorant investors. Only then can all the tranches be sold out. Or else you’ll have half of them sold out and the other half unwanted.

When people get more educated about the nature of these kind of investments, they will stay out of the other half that undercompensate them. Then the party that have liability to the unsold securities will have to continue to bear the mortgage risks. That’s not the purpose of securitization in the first place. Securitization comes with the purpose to transfer the mortgage risk to the buyers, both the smart and the stupid.

I don’t know what you mean by IO trigger, but I know IO stands for Interest Only, which means your investment will receive interest payment only. There will not be any principal amortization. And the higher the interest rates, the lower will be the prepayment rate, and the more certain you’ll continue receiving interest payments into the future.

Add your own answer in the comments!

Please explain securitization in a simplest way?

Question by closeguy: Please explain securitization in a simplest way?
I wanted to know the concept of secuterization, so when I search google I came across few articles which state – :

Securitization is the taking of an asset or right to a cash flow and then structuring it so that it becomes a security.

Example : mortgage securitization or asset securitization

But, I still don’t think I completely understood the concept.

What does transforming asset into security mean ? Please give short example . When and how does bank securitization?

Best answer:

Answer by Raysor
It is taking a financial instrument and turning it into a share that can be traded. For example a loan is a fixed term, interest producing instrument. This could be turned into a share. Its value would depend on the borrowers ability to repay the loan and the share dividend would depend on the borrowers ability to repay the interest.
A better example might be ETFs. Let’s say you have an index (FTSE100 or DJ30). You cannot buy or sell the index but you could buy all the underlying constituents. With an ETF someone buys all the constituents and securitises them into a share. In this way that someone could sell the “index” to lots of small investors.

What do you think? Answer below!

Q&A: securitization audit?

Question by shann: securitization audit?
I’m looking for a company in Virginia who does securitization audits for foreclosures.
Also can you give me names(company) and numbers that can help

Best answer:

Answer by hyper-capitalist
There is no company that does securitization audits for foreclosures. There are auditors that comfirm compliance with the securitization documents and federal laws.

I am assuming that someone os trying to prove that the trust actually owns the Promissory Note in a foreclosure. Ask for the recorded assignments of loan documents and allonges to promissory note that details ownership of the loan from the originator to the trust. There will be several assignments.

What do you think? Answer below!

Is the Clinton administration to allow the securitization of subprime mortgages? If so, how?

issue by ortisthetortoise : Is the Clinton administration to allow the securitization of subprime mortgages? If so, how?
I can not find anything specific to the securitization of subprime mortgages in the “CRA 1995 changes” that everyone parle.Essayer to understand whether this accusation is made or folklore.Y there a specific law or order Executive which refers to this Best answer:

response by Chris J
http://www.miscellanynews.com/opinions/don_t_blame_the_guiltless_for_economic_crisis

What do you think? Answer below!

What is a securitization audit? Does it help with foreclosure?

Question by Curt Gallows: What is a securitization audit? Does it help with foreclosure?
OK, I received my notice of default and am scared all to heck about foreclosing on my home in Tampa, FL. I just heard about this thing called a securitization audit. Can anyone tell me what they are and if it will help with my foreclosure?

Best answer:

Answer by real estate guy
First, you need a lawyer. You can’t just walk away. YOU NEED A LAWYER.

I googled it. It’s when the bank will review the whole loan to make sure that you didn’t lie about getting the mortgage. For example, you didn’t lie about the income amount or source. You didn’t lie about source of downpayments., they will review tax returns, etc.

Add your own answer in the comments!