Note Principal Balance (Unpaid)The initial Note Principal Balance (also known as Par) of a given security on the closing date less all principal payments made on the security…
Prepayment SpeedThe annualized rate at which borrowers pay off their loans ahead of schedule. Also referred to Constant Prepayment Rate, or CPR.
Real Estate Owned (REO)The ownership of collateral property by the lender - usually a bank - after an unsuccessful sale at a foreclosure auction.
Realized LossA loss recognized when assets are sold for a price less than the outstanding principal balance of the asset plus interest and liquidation expenses.
SecuritizationThe process through which financial assets are pooled, transferred to a trust or other Special Purpose Entity (SPE), and issued and sold to investors in…
Security (-ies)A general term for stocks, bonds, options, subscription rights, warrants and other tradable investments that confer a right to income or ownership.
Subprime LoansLoans extended to borrowers who do not qualify for the best market interest rates due to a deficient credit history and/or a low credit score.
TrancheOne of several related securities issued in a Securitization transaction. Tranches in the same transaction may have different maturity, subordination and…
Underlying LoansLoans underlying a security that produce the cash flows used to pay off that security.
UnderwriterA company or other entity that administers the public issuance and distribution of securities from a corporation or other issuing body.
Weighted Average LifeThe average number of years for which each dollar of unpaid principal on a loan or mortgage remains outstanding.