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US SUBPMORTGAGE C

Aditya

Estie

Bima

Hanif

IngeA

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explainedA type of mortgagethat isnormally made out to borrowers(prospective homeowners) with

lower credit ratings

SUBPRIMEMORTGAGE

Interest rate charged is higherthan a conventional mortgage

Risk is reduced

credit enhan

Requires addit

insurance, or o

party agreeme

Compensation

in case the bor

defaults

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credit risk

decreases

CREDITENHANCEME

borrowers

credit rating

goes up

false

of g

credit

ex

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Reference Portfolio

Loan

Loan

Bond

Bond

ABS

ABS

ABS

CDS

CDS

CDS

Other

CDOS

Securiti

AAA

AA

A

BBB

BB+ or