Mortgage Derivative

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Mortgage Derivative

A security with a value based upon principal and interest payments on a pool of mortgages. This entitles the owner to a claim on the principal and interest payments on the particular mortgages backing the security. The risk of a mortgage derivative ultimately comes from the risk of default of the underlying mortgages. A mortgage-backed security is the most common type of mortgage derivative.
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Yiu, who will be trading mortgage derivatives, has previously worked at Deutsche Bank for nine years.
We believe that our unique expertise in several asset classes, including senior loans, mortgage derivatives, commercial real estate and private and public debt investments can help Australian investors meet their goals.
Credit Suisse was not gutted by the 2008 crash, unlike UBS, which lost $50 billion in failed bets on toxic credit and mortgage derivatives on Wall Street.
The first securitized mortgage derivatives (also called collateralized debt obligations, or CDOs) were invented by a team at investment bank J.
where he structured and traded new-issue CMOs and mortgage derivatives for the firm.
You should not hang all the people making financial models, though they did play a part in people valuing mortgage derivatives in a naive way," said Derman, adding that people at respectable firms on Wall Street generally do understand the limitations of models and their proper use.
Certain of my complaints about government bailouts and limitless credit enjoyed by big business were maybe prescient, but were too scandalized to impress anyone living now in the era of mortgage derivatives and hedge fund skullduggery.
20, 2010, which allows both foreign and domestic corporations to spend unlimited amounts from their general treasuries on political campaigns, is an insurmountable obstacle to addressing problems such as the mortgage derivatives crisis and the economic collapse.
In addition, ISDA notes that credit losses were positively affected by actions of the Fed with respect to AIG, which prevented increased losses across several business lines, including mortgage derivatives products, and, potentially, cascading defaults from other counterparties not involved with mortgage derivatives.
Financial disasters such as Enron, WorldCom, the subprime mortgage derivatives crisis, and the Madoff Ponzi scam also belong to the same class.
Ratings agencies' credibility is still tarnished by their handling of sub-prime mortgage derivatives and the collapse of Lehman Brothers in 2008, so some governments may look the other way if agencies get tougher on sovereign debt.
This growth is important to note because a critical factor in the recent crisis was counterparty failure in OTC trading of mortgage derivatives.

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