Glossary of Terms

Securitization 2015-11-11 08:00:00

Securitization

A financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling their related cash flows to third party investor securities.

For example, commercial mortgage-backed securities are a large group of mortgages against commercial properties that are pooled together and their collective cash flow is turned into a security like a stock or bond.