What are the Advantages of Securitization?

What are the Advantages of Securitization?

In the process of securitization, one or more assets is turned into a security, which can be traded on the financial markets. Mortgage debt is the most commonly securitized asset, with common securitized products including mortgage backed securities (MBS), commercial mortgage backed securities (CMBS), and commercial debt obligations (CDOs). Car loans, credit card debt, and student loan debt is also commonly securitized. In general, securitization is highly advantageous, as it makes loans more available for commercial real estate borrowers, stimulating the market-- but it has a few downsides, too.

Read More