What is the Loan-to-Value (LTV) ratio?
Explanation
LTV measures the leverage on the property. Lower LTV implies higher borrower equity.
Other questions
What is the primary role of the Special Purpose Entity (SPE) in a securitization transaction?
Which of the following best describes 'bankruptcy remoteness' in the context of securitization?
How do Covered Bonds differ from traditional Asset-Backed Securities (ABS) regarding the balance sheet?
What type of recourse do investors in Covered Bonds possess?
Which redemption regime converts a covered bond into a pass-through security if the original maturity is missed?
In the context of credit enhancement, what is 'Overcollateralization'?
What is the 'waterfall' structure in a securitization?
Which tranche in a securitization structure is typically the first to absorb losses?
What is the primary benefit of securitization for the issuer (bank)?
In a credit card ABS, what is the 'lockout period'?
What triggers the end of the lockout period and the start of principal distribution in a credit card ABS?
Which of the following is considered an amortizing asset in ABS?
In a residential mortgage, what does a lower LTV generally imply?
What defines a 'strategic default' by a borrower?
What is the difference between Agency RMBS and Non-Agency RMBS in the US?
What is 'contraction risk' in the context of RMBS?
What is the primary purpose of a Collateralized Mortgage Obligation (CMO)?
In a Sequential-Pay CMO, how are principal payments distributed?
What is a 'Z-tranche' in a CMO structure?
How does the value of a Principal-Only (PO) security react to falling interest rates?
Why might an Interest-Only (IO) security have a negative duration?
What is the function of a Planned Amortization Class (PAC) tranche?
What does the Debt Service Coverage Ratio (DSCR) measure in CMBS analysis?
Which feature essentially distinguishes CMBS from RMBS regarding prepayment?
What is 'Defeasance' in a CMBS?
What is 'Balloon Risk' in a CMBS?
What is a Collateralized Debt Obligation (CDO) generally backed by?
What is the role of the Collateral Manager in a CDO/CLO?
What are Solar ABS typically collateralized by?
In Solar ABS, what is the 'Pre-funding period'?
Which entity in a securitization is known as the 'disinterested trustee'?
What is 'Excess Spread'?
What is a 'Pass-Through Rate'?
Which risk is defined as the uncertainty regarding the receipt of cash flows due to the option to pay off a loan early?
What is the primary difference between a 'recourse loan' and a 'non-recourse loan'?
What is 'Time Tranching'?
What is the 'Weighted Average Maturity' (WAM) of a mortgage pool?
Which agency carries the 'full faith and credit' of the US government?
In a CDO, which test ensures that the assets exceed the liabilities?
What happens if a CLO manager fails an overcollateralization test?
What is the 'equity' tranche in a CLO primarily designed to provide?
Which of the following is an example of external credit enhancement?
What is 'Yield Maintenance' in CMBS?
What is the typical amortization structure of a Commercial Real Estate (CRE) loan?
Which ratio assesses the borrower's ability to cover monthly debt payments from gross income in residential lending?
In the context of 'Support Tranches' in a CMO, what is their primary function?
What is the 'Extension Risk' associated with MBS?
What is a 'workout period' in CMBS?
Why do banks use Securitization to improve profitability?