User:Sdawar16/Financial asset securitization investment trust

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Securitization in relation to FASIT is the undertaking and pooling of bundles of debt which may include commercial mortgages, residential mortgages, and other debt obligations such as credit cards. It is under the branch of structured finance which relates to the management of leverage and the risk and serves as a very large source of financing across economies around the world. Securitized products such as Mortgage-backed securities allow investors to get paid from principal and interest cash flows which are usually collected from underlying debt and collateral and then paid back based upon the capital structure of the the security, whether it be in relation to mortgages and real estate, or any other debt products that can be financed in this way. Securitized products also provide a huge source of financing in economies and funds more than 50% of US household debt. Securitized products are made up of a waterfall model which is divided into tranches and pays investors based upon the level of riskiness their investments are. Securities with lower risk are usually paid first and are considered investment grade investors which invest in bonds that usually have a “AAA rating” with subprime securities having lower credit ratings such as “BBB”. Financial asset securitization investment trusts employ the special purpose vehicle technique  in order to create a separate company and to hold the securitized debt in the form of a limited liability venture and to carry large mortgages and in order to originate the credit loans.