What is Credit Enhancement?
One of the major risks in securitization relates to the variability of cash flows from the underlying assets. If mortgage borrowers default […]
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What is Overcollateralization?
Overcollateralization (OC) is an important concept in structured finance, especially in collateralized loan obligations (CLOs) and other asset-backed securities. For CLOs and […]
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How are Servicing Metrics Different for Loans vs Credit Cards?
Banks and other financial institutions provide various lending products to consumers and businesses, including installment loans and revolving lines of credit like […]
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What is a Surety Bond and Why it’s Needed for a Lending License
A surety bond is a crucial component in obtaining and maintaining a lending license. This post will provide an in-depth overview of […]
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What is a Trustee?
A trustee plays a critical role in a consumer loan debt warehouse facility. As the independent third party oversight on the facility, […]
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What is a DACA Account? (Deposit Account Control Agreement)
A Deposit Account Control Agreement (DACA) is a legal agreement that gives a lender some control over a borrower’s bank account. DACAs […]
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What are Protective Provisions for Warehouse Facilities?
A protective provision, also known as a veto right, is a clause that gives investors a level of control or provides safeguards […]
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What is a Structuring Fee?
A structuring fee is an upfront fee charged by lenders when putting together a new debt warehouse facility. It is intended to […]
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What is Tangible Net Worth?
Tangible net worth (TNW) is an important financial metric that lenders use to assess a company’s financial health and ability to repay […]
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What is an Event of Default?
An event of default (EOD) is a breach of the terms of a debt facility or loan agreement by the borrower. EOD […]
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