What is securitization?

Posted by

To view Verified answers click on the button below.

Securitization is the process of taking an illiquid asset, or group of assets, and through
financial engineering, transforming it (or them) into a security.

Securitization is the financial practice of pooling various types of contractual debt such as
residential mortgages, commercial mortgages, auto loans or credit card debt obligations
(or other non-debt assets which generate receivables) and selling their related cash flows
to third party investors as securities, which may be described as bonds, pass-through
securities, or collateralized debt obligations (CDOs).