Mortgage Derivative

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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The contribution to noninterest income of the non-operating mortgage derivative asset was $2.0 million lower this quarter than the first quarter of 2015.
With so many foreign banks buying into our mortgage derivative schemes, no other outcome was possible.
"The process of unwinding subprime mortgage derivative swaps and other commercial derivative swaps hasn t materially improved over the last three months but is now being overlooked by investors as the banks are simply not talking about them," Dickson said.
In one form or another, the AIG and mortgage derivative cases share characteristics that result in similar outcomes: Notwithstanding a great many records in many places, the result was not the clarity and certainty those records were supposed to ensure, but opacity, confusion, and staggeringly large financial losses.
Imagine if we had allowed the mortgage derivative markets to do the same thing.
The first effort involves an interagency statement issued in February of this year on the proper use by banks of so-called "high risk" derivative instruments-- investments such as interest- or principal-only mortgage derivative securities.
A third major mortgage derivative blowup hit an $827 million mutual fund run by Piper Capital Management, a subsidiary of Piper-Jafray Companies Inc., of Minneapolis, Minnesota.
12 May 2010 - US Morgan Stanley's (NYSE:MS) CEO James Gorman said today he was not aware that the firm was under scrutiny by local federal authorities in relation to mortgage derivative deals, as reported by the Wall Street Journal.
A high-risk mortgage security is defined as any mortgage derivative product that has (1) an expected weighted-average life greater than eight years (i.e., "average life" test); (2) an expected weighted-average life that extends by more than four years or shortens by more than five years assuming immediate and sustained parallel shifts in the yield curve of plus or minus 300 basis points, respectively (i.e., "average life sensitivity" test); or (3) an estimated change in the price of more than 16 percent due to an immediate and sustained parallel shift in the yield curve of plus or minus 300 basis points (i.e., "price sensitivity" test).
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.

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