Document Type
Article
Publication Title
Cardozo Law Review
Abstract
The securitization of mortgage loans and other receivables benefits society and rests on a strong legal foundation. Securitization lowers the financing costs for borrowers and originators of loans by avoiding the costs imposed by the Bankruptcy Code on the secured creditors of operating companies. This article demonstrates how securitization avoids these costs by combining two long recognized legal devices, (1) a true sale of receivables to a buyer (2) that is a separate legal entity whose sole purpose is to finance the receivables. This structure separates the risks associated with the receivables, which creditors can more easily assess, from the murkier risks associated with an operating company.
First Page
1655
Last Page
1742
Publication Date
4-2004
Recommended Citation
Plank, Thomas E., The Security of Securitization and the Future of Security (July 1, 2004). Cardozo Law Review, Vol. 25, No. 5, 2004, University of Tennessee Legal Studies Research Paper No. 55, Available at SSRN: https://ssrn.com/abstract=1334831