Asset-Backed Securities - Mike Gasior

The speaker provides a detailed overview of asset backed securities (ABS) and discusses the differences between asset backed and mortgage backed securities.  Asset backed securities package loan products which are not single family mortgages.  ForThe speaker provides a detailed overview of asset backed securities (ABS) and discusses the differences between asset backed and mortgage backed securities.  Asset backed securities package loan products which are not single family mortgages.  For example, it could package car loans, credit card loans, commercial mortgages, or even student loans. 

He breaks down the structure of the security and discusses how each involved party will make money off this type of security.  Investors, servicers, and the loan companies themselves will all split the principal and interest payments.  Investors can be subdivided into tranches with different classes of investors and different coupons for the level of default risk that they are willing to assume.