Write here all you know about them. It can use us as a good review I’ll start - usually a first lien on a property for a borrower with Marginal credit history
Uses PPC, similar to PSA. However, PPC is not generic, but issuer-specific
HEL Floater- underlying uses 6 month libor, and securities use 1 month libor. due to the mismatch the floater has an avail funds cap. Non-Accelerating Senior Tranche (NAS) in a HEL; recieves no prepayments in early years, and thus this reduces contraction risk. In later years, the NAS recieves a relatively high % of prepayments, thus reducing extension risk.
Regarding the cap rate on a HEL floater, it is also floating.
Can someone explain avail funds cap pls… Can’t seem to remember.