Re:Do You Know Who Owns Your Debt?
by fbonetti on Saturday November 16, 2019 @01:05PM
(#21553978)
That already exists. You’re describing mortgage-backed securities broken into tranches.
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| on HN ]
That's not correct. The collateral is usually shared among all tranches. You could have MBS deals w/ tranches backed by separate collateral pools but these are defined at origination. It's not that different tranches are backed by different subsets of the collateral. The cash received from all mortgages is pooled and then prioritized based on tranche seniority and other rules specific to the securitization.