| Public Course Delivery Method: Classroom Course
Duration of Course: 1 day
About this Course
What is the cost of issuing AAA securities backed by high-risk loans? Is this feasible? What should your strategy be to provide confidence to your investors?
Credit enhancement is a vital element in structured finance. While it is imperative to distinguish different types of credit enhancement, it is also important to properly match credit enhancement types with correct security varieties. With Credit Enhancements Strategies, participants will identify different mechanisms of providing credit enhancements within structured mortgage-backed securities (MBS), ranging from pass through (PT) securities to the more complex collateralized mortgage obligations (CMOs). In secondary markets the importance of a measured and well planned approach to credit enhancement provides the ability to differentiate businesses in terms of the quality of investment opportunities they provide to investors. The role of rating agencies in determining levels of enhancements will be studied. Internal versus external enhancement strategies and the role of mortgage insurance as a means to enhancing the collateral credit quality will also be covered. The quality of collateral and its effect on enhancing credit levels to investors is also discussed.
The workshop includes case studies as well as hands-on exercises that will give participants the opportunity to demonstrate their understanding of the concept through group interaction and workshop discussions. Participants will be provided with a package of materials including pertinent articles, rating agency reports and sample documentation from actual deals.
Learning Objectives
At the end of the workshop, students will be able to:
- Demonstrate how mortgages find their way into securities through different instruments on offer
- Interpret how the secondary markets infuse liquidity into the lending industry, including key stakeholders and the current macroeconomic view of the markets
- Describe which common structures are used to create mortgage backed securities varying in degrees of complexity
- Identify the different purposes these common structures serve and the roles played by the different entities in the process of loan acquisition and securitization
- Identify how credit rating agencies like S&P, Moody’s and Fitch play a major role in determining the structure composition of mortgage backed securities
- Name the underlying difference in the rating criteria between investment grade and non-investment grade securities
- Define the concept of credit enhancement, the purpose it serves, the basic types of credit enhancement, the key players who provide, consume and evaluate credit enhancements
- Describe GSEs’ role in providing guarantee and how it affects credit enhancement in MBSs
- Predict recommendations based on current industry and macroeconomic factors
Who Should Attend
This course will prove informative to product managers, securities analysts, production analysts, risk managers, and business analysts working in the field of mortgage product structuring and secondary marketing.
| Successful completion of this event will earn the participant 2 points toward MBA's Certified Mortgage Banker (CMB) Designation. |  |
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Upcoming Public Offerings
There are no public offerings of this course scheduled at this time. Check back soon for new dates, or call CampusMBA (800) 793-6222 (selection option 3) for details.
For Your Staff
Most CampusMBA programs, including this one, can be offered at your location or online for your staff at your convenience. It is also customizable to fit within your corporate goals and culture. For more information visit campusmba.org/corporatetraining or call (800) 793-6222 (select option 3).
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With more than 30 products and resources addressing the commercial/multifamily industry, and many more in development, CampusMBA strives to help you improve performance and positively impact your company's competitive advantage. Visit www.campusmba.org/secondary for an interactive listing of current products and services on the secondary market.
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