Hi,
Just wanted to note that i live in Australia as i know that the process may be different in other countries. I am studying about securitisation and Mortgage Backed Securities (MBS) and i wanted to know how they work in regards to Special Purpose Vehicles (SPV's). When Authorised Deposit taking Institutes (EG banks), have all these loans and they create a loan parcel do they sell it to SPV's? If so, how is this beneficial to SPV's and investors who buy these securities from SPV's? If someone can explain all the stakeholders in this process and how the flow of funds work- it would be greatly appreciated. (Stakeholders including borrowers, ADI's, SPV's, Investors and Financial Managers)
Also, when these securities are sold to investors and the borrower still makes repayments, where is the repayment money going to?
I am confused so i hope this question makes sense!!
Just wanted to note that i live in Australia as i know that the process may be different in other countries. I am studying about securitisation and Mortgage Backed Securities (MBS) and i wanted to know how they work in regards to Special Purpose Vehicles (SPV's). When Authorised Deposit taking Institutes (EG banks), have all these loans and they create a loan parcel do they sell it to SPV's? If so, how is this beneficial to SPV's and investors who buy these securities from SPV's? If someone can explain all the stakeholders in this process and how the flow of funds work- it would be greatly appreciated. (Stakeholders including borrowers, ADI's, SPV's, Investors and Financial Managers)
Also, when these securities are sold to investors and the borrower still makes repayments, where is the repayment money going to?
I am confused so i hope this question makes sense!!