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Home » Store » News » Alternative Performance Triggers May Provide Better Protection to Investors Holding Underperforming MBS

Alternative Performance Triggers May Provide Better Protection to Investors Holding Underperforming MBS

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Certain alternative performance triggers might provide superior protection to investors in home-equity securitization deals that are performing below expectation, according to a new analysis by Moody’s Investors Service. Most home-equity deals feature two performance triggers to preserve credit enhancement: a cumulative loss trigger, which is activated if the losses on a collateral pool go beyond a certain level, and a delinquency trigger, which kicks in when serious delinquencies...
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