asset backed securities

small business administration (SBA) securities are backed by full guarantee by U S govt so does that mean that they are default free???it is mentioned that all ABS are credit enhanced…according to me SBA should not be credit enhanced bcoz they are backed by full faith and credit of the US govt…plz help…im fnding this point very confusing…

they could be enhanced to protect against prepayments. maybe they are enhanced to make sure that the payments come in on time, even though they are guaranteed they could be late. I wouldnt get so held up on such a small detail.

thanx a lot :)i know its not very important but im not able to move ahead if i find sum point confusing…i keep thinkin abt it over and over again…:stuck_out_tongue:

you have to realize there is a lot not covered in the material, a lot of ways the same problem can be solved, etc. So dont get too hung up :smiley: