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Answer: The mortgage servicer ensures that the SPV delivers on its contractual obligations
**Correct answer: D** In an RMBS securitization: - The **originator** pools mortgages and sells them to an **issuer/SPV**. - The **SPV** issues securities to investors. - Securitization helps originators **raise cash** so they can make more loans. - The **servicer** collects payments, manages delinquent loans, and remits cash flows, but it does **not** ensure that the SPV fulfills its contractual obligations. Therefore, **D is the exception**.
Author: Manit Arora
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Q-102.1. Each of the following is true about the securitization of residential mortgage backed securities (RMBS) EXCEPT for:
A
The originator(s) pools mortgage loans and sells them an issuer or special purpose vehicles (SPVs), which issues securities to investors
B
Key benefits of securitization, including RMBS, include but are not limited to (i) transfer of credit risk to investor and (ii) diversification via pooling of credit-sensitive assets
C
By selling mortgage loans to issuers in a securitization, originators raise cash to underwrite new, additional loans
D
The mortgage servicer ensures that the SPV delivers on its contractual obligations
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