Securitization

• Transfer some of the risks of ownership to parties more willing or able to manage them,
• Access broader funding sources at more favorable rates,
• Save some of the costs of on-balance-sheet financing, and
• Manage potential asset-liability mismatches and credit concentrations.

See also Accounting

Learn More

Asset Securitization (Comptroller's Handbook, November 1997)
Covers a bank's use of asset securitization as a way to generate funds, manage the balance sheet, and generate income

References

• Accounting and Reporting for Mortgage Loan Commitments (OCC 2005-18, May 2005); Interagency Advisory
  Covers accounting and reporting for mortgage loans held for resale or sold under mandatory delivery and best efforts contracts
• Asset Securitization Activities (OCC 1999-46, March 2010); Interagency Statement
  Addresses weaknesses in the asset securitization practices of some insured depository institutions including inadequate controls and liquidity risk
• Capital Treatment for FAS 166 and FAS 167 (ASC 860 & 810) (OCC 2010-5, February 2010); Final Rule
  Covers modification of the treatment of certain structured finance transactions involving a variable interest entity
• Complex Structured Finance Transactions (OCC 2007-1, January 2007); Interagency Statement
  Covers examples of complex structured financial transactions that often pose elevated risks to financial institutions
• Covenants Tied to Supervisory Actions in Securitization Documents (OCC 2002-21, May 2002); Interagency Advisory
  Addresses the safety and soundness implications of certain covenants included in securitization documents
• Implicit Recourse in Asset Securitization: Policy Implementation (OCC 2002-20, March 2010); Interagency Guidance
  Highlights several examples of post sale actions taken by institutions with respect to securitized assets
• Mortgage Banking: Interagency Advisory on Mortgage Banking (OCC 2003-9, February 2003); Interagency Advisory
  Provides guidance regarding mortgage-banking activities, primarily in the valuation and hedging of mortgage-servicing assets