Securitization

Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities.

This process enables credit originators to

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.

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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

Date	ID	Title
05/10/2013	OCC 2013-13	Market Risk Capital Rule: Clarification of the Treatment of Certain Sovereign and Securitization Positions
01/24/2012	NR 2012-11	Acting Comptroller Talks About Securitization and Derivatives at the American Securitization Forum