Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

Lakhbir Hayre has created a comprehensive and authoritative reference guide for the asset-backed and mortgage-backed securities markets. In compiling this book, Hayre drew on the expertise of ABS and MBS specialists from Salomon Smith Barney, which was a pioneer in the development of these markets and still trades the largest volume of the securities. This huge volume includes plenty of charts, graphs and illustrations as companions to its enormously detailed and clearly explained descriptions and analysis. getAbstract.com recommends this book as a useful reference for experts and an enlightening introduction for securitization novices.

Summary

Securitization Overview

Mortgage-backed securities (MBS) and asset-backed securities (ABS) make up the biggest sector of the bond market, forming the core holdings of almost all U.S. institutional fixed income investors. Wall Street dealers trade billions of dollars of these securities each day. Because these securities are so complex and varied, and because detailed information is hard to come by, very few people in the financial industry or in academia have a detailed understanding of their characteristics.

MBSs and ABSs are securities backed by the cash flows from a specified pool of assets. Securitization is the process that transforms non-tradable financial assets, like car loans or commercial mortgages, into these tradable securities. A majority of this market is made up of securities backed by residential mortgage loans. The rest of the market consists of other kinds of assets that have been securitized, including commercial mortgage loans, car loans and credit card receivables.

The cash flow from the assets are channeled to investors in one of two ways:

1) They are passed through to investors, after administrative or servicing fees are subtracted...

About the Author

Lakhbir Hayre is a mortgage officer at Salomon Smith Barney and the firm’s leading expert on mortgage-backed and asset-backed securities.


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