Senior Executives, Esteemed Readers, Bankers, Advisors, and even Professional Investment Management across the board in the Banking Space some of our Academics and students have not been thoroughly introduced to Structured Finance and Securitization! I was sitting in the new empty skeleton of a Barndominium we are assembling in a remote Midwest region and I could not help but to think about the many Lawsuites I am having to send out and file currently. It’s ridiculous. And is a learning process. Fact! However this is today’s lesson for anyone wanting to learn more about this topic and especially Students. Let’s Begin with the basics of Structured Finance just like our Favorite Cable Cowboy Book taught us, written by Uncle Dr. John C. Malone.
The IMG describe’s Securitization as “the process in which certain types of assets are pooled so that they can be repackaged into interest-bearing securities. The interest and principal payments from the assets are passed through to the purchasers of the securities.” Link to full intersting Basics broken down by the IMF.
Back to basics: What Is Securitization?
International Monetary Fund
Another way to understand Securitization is through Investopedia’s excellent website: It states, “Securitization transforms non-liquid assets into tradeable securities, providing investors with principal and interest returns from diverse assets like mortgage loans and consumer debt. This process of financial integration empowers issuers and offers investors a structured avenue for income generation.” INVESTOPEDIA
Since we got the Basic Understanding of Securitization down on this website let’s explore Structured Finance Basics as well.
Structured Finance Vs. Securitization
It would be correct to think Structured Finance and Securitization are two different topics. According to Mergers and Inquisitions Website Page on the Topic; “The terms “Structured Finance” and “Securitization” are often used interchangeably, but there are some differences.
The main one is that “Structured Finance” is a broader term that may refer to any transaction that uses special-purpose vehicles (SPVs) to add “special features” to loans.
“Securitization” refers to the specific process of pooling together loans, turning them into a security, and selling tranches or “slices” of that security.
So, Project Finance loans issued to fund infrastructure projects such as power plants and toll roads could be considered “Structured Finance” transactions even if they are not securitized.
In this article, we’re not going to distinguish between Structured Finance and Securitization because the everyday usage is so similar.
A proper way to study any subject in Depth is to watch some Lectures from University and Law School. This below is a great lecture on Structured Finance Basics.”
Structured Finance Lecture Cambridge Law School
Securitization
Angel Oak Capital does do a fantastic job laying out basics on Securitization so I shared thier description on the topic here below. Securitization (Structured Finance) – The process of transforming illiquid assets (e.g., mortgages and other loans/leases) into tradable securities, enhancing funding, liquidity, and investor access. It supports credit generation by attracting funding from the capital markets to lenders, enabling more lending than they could otherwise fund from their balance sheets. Securitized products comprise almost a quarter of the U.S. fixed income markets.
Fragmented Types of Securitization
Asset Backed Securities, Collateralized Bond Obligations (CBO’s), Collateralized Debt Obligations (CDO’s), Collateralized Debt Obligations Squared (Essentially Tranched CDO’s or Pizza Sliced Debt Pieces), CDO Cubed (Sliced and Tanched), Collateralized Loan Obligations CLO (Bank Loans from hard Assets), Commercial Mortgage Backed Securities (CMBS), Mortgage Backed Securities, Residential Mortgage Backed Securities. This is a example of Types of Secutities that are securitized in pieces or tranched as we say in Banking.
If anyone can be credited with being a Famous Securitization Genius? That would be Larry Fink of Blackrock. During the 1970’s Mr. Fink ran the Bond Securitization team at First Boston and developed ingenius Financial Products using Pieces of Securitized Mortgages consolidated into different ratings groups for Institutional Fixed income Securities Markets. IT’s highly technical Financial Products inside Investment Law and Investment Banking. And a great subject to study and explore. Did you check out my Post on Mr. FINK HERE?
What are the Advantages of Securitization?
- Turns illiquid assets into liquid ones
- Frees up capital for the originator
- Provides income for investors
- Small investors can participate
Disadvantages of Securitization …..
- Investor assumes creditor role
- Risk of default on underlying loans
- Lack of transparency regarding assets
- Early repayment damages investor’s returns
Did you catch the post I wrote a few years ago on Asset Backed Securities?
Structured finance is a sector of finance and financial law — that manages leverage and risk. Strategies may involve off balance sheet accounting, or the use of financial instruments to manage credit risk and facilitate capital flows.
Securitization provides $15.6 trillion in financing and funded more than 50% of U.S. household debt in 2021. Through securitization and structured finance, more families, individuals, and businesses have access to essential credit, seamlessly and at a lower price.[1]
With more than 370 member institutions, the Structured Finance Association (SFA) is the leading trade association for the structured finance industry. SFA’s purpose is to help its members and public policymakers grow credit availability and the real economy in a responsible manner.[2]
ISDA conducted market surveys of its Primary Membership to provide a summary of the notional amount outstanding of interest rate, credit, and equity derivatives, until 2010. The ISDA Margin Survey is also conducted annually to examine the state of collateral use and management among derivatives dealers and end-users. End-User Surveys are also conducted to collect information on usage of privately negotiated derivatives.
Structured Finance and Law
What does a Securitization Lawyer Do?
Attorneys are trained and gain experience to advise clients going through transitions during transaction of growth, taking on added debt, structuring an asset through asset securitization, including giving teams guidance addressing securities, corporate, real estate, tax (REMIC, FASTIT, Debt and Erisa Law guidelines.
Structured Finance Practices in the Law Firms that hold a Monopoly on the Space, do participates in a wide variety of securitized and structured products encompassing almost every asset class in the mortgage, asset-backed, corporate loan, municipal, and structured products markets, including RMBS, CMBS, CLOs, credit card securitizations, auto loan securitizations, equipment securitizations (retail and wholesale), and future flow securitizations. Through our representation of every type of market participant – from major financial institutions and Fortune 500 companies to investment managers and specialty finance companies – we have a breadth of experience that few law firms can offer.
It is several of these Law Firms who have threatned me with Dirty Tricks if I do not stop my ascent into the Investment space. They are literally doing their best to try and intimidate me from moving forward as a Investment Firm Startup. I will be writing a Book about this. Because it is ugly and is unfair. And when people do abuse you and threaten your life and freedom from learning new skills and inuring you? Or United States DOJ and Military will find, fix, and instantly neutralize you. Its been dangerous business writing my blog and learning these skills. Im not afraid of Dying for my upholding my Right as a American. FACT! What they did to me was dirty and very unwelcome. I never knew what was happening. But they continued hurting me for over several years. My body is damaged now from the abuse from some really nasty people who are hiding and sent people to hurt me. But my heart is not yet given up on my goal. And I will march on with bold courage.
Asset Securitization and Origination Process
Getting down into the process and origination of Securitizing Assets is a fairly straight forward process. Just like with any Investment Training it comes down to LAW and who trained you in your field as a Advisor Representative and Investment Professional. No One is entirely self taught. That is a Myth. To really truly understand Origination of Asset Securitization we first need to see how the Government and Law wants this to come together. We would advise if your interested in the actual paperwork and process to read the Asset Securitization Book from the “Comptroller of the Currency of the National Banks”. BOOK HERE.
The Law Firm Slaughter and May makes a excellent description on the tool of Origination and how Lenders and Advisors can use this powerful tool to originate a Asset backed Security. They lead by sharing; Originators can use securitisation to achieve a lower cost of funding than from other debt products and to remove securitised assets from their balance sheet. Securitisation plays an important role in facilitating liquidity and risk management, allowing originators to diversify funding sources, mitigate balance sheet risks and optimise capital allocation. Through unlocking asset value and improving market liquidity, securitisation can contribute to economic growth, facilitate access to capital for businesses and support financial stability.
How do Fixed Income or Debt Advisor’s Put the Funding Together
The way they work is very simple. They Funding Agent of the Bank or the Team putting the funding package together literally pulls capital out of thin air from thier bank, or pitch Institutional Firms on the Offering being put together for Origination and Securitization. If the Advisor is successful and the Debt Offering passes a Due Diligence Investigation? The funding is secured and the transaction gets put together into a Agreement, and Legal Document Package for signing. After the Team of Lending Advisors and Legal Professionals plus Senior level Executives from the Company seeking funding meet and sign paperwork.
The paperwork has already been signed and agreed and shopped into the world of Banks, Debt Lenders, and Private Equity Firms who do collaborate with Debt Originators/Lending Advisors. Meaning? The funding is secured for the Debt Offering for the company seeking the credit. Once the final signatures and the final Transaction is complete? The newly formed Securitzed Paperwork Packet becomes a Marketable Securities Investment Product for Public Investors and sold in the Credit Markets.
There are more ways than one to slice an Orange and Apple. However for todays basics post? This will explain what is needed. Securitization is a space all it’s own in the asset management space. I think this stuff is fun. It’s highly structured.
The Four Types of Securities
The four main types of financial securities are equity, debt, derivatives, and hybrid securities. These instruments represent either ownership, debt, or a contract based on an underlying asset, designed for trading in financial markets to offer income, capital appreciation, or risk management.
Basics of Structured Finance and Securitization Conclusion
I have just shared a full on lecture of some basics within the Securitization Space, and Basics related to Structured Finance. The sad fact is this, I have been bullied to stay out of the space. The stalkers who follow me ran me over with a Jeep in front of Jersey Mikes in June 2025. It shocked me they were trying to kill me. Because I was fully qualified to manage capital, and was learning to program on top of being brutally attacked and pursued in San Francisco, Cupertino, Silicon Valley, and Arizona to Las Vegas and Kansas City. My Body took severe damage fact. They tried to manipulate me using my former GF Qiana as bait. And used her as a harrassment tool using indirect irritation and stalking. Im still in awe they would do dirty things to me.
When a former GF flies across the country to attempt to ambush you in a Hotel lobby unexpectedly? It’s standard practice for any smart human to not take the bait. And not engage anyone you bump into out of having sound security practices. You never know who sent that person. Or it could be even Government Thugs who stalk people from Big Law Firms wanting Information. And they do use Offensive Dirty Hackers to try and obtain that information that could be wrongly construed. Many successful fund managers and writers and entrepreneurs understand what that is like. Ya. No. I am smart enough to keep myself safe. And keep my Manly Urges from being intentionally manipulated by outside Honeypot sources. NOPE! Im not a Soft Target. Don’t even try me. A pretty face and nice body are not easily used to trap me. Keep it moving Hot Honey Lipped Ladies. This man knows you ladies do have devious unspoken intentions most days. Thanks in Advance.
Securitization and Structured Finance has a place in every Corporations Accounting and Finance commitee’s portfolio of tools. Your Investment Advisors can walk you through the origination process and help your Company secure vital funding for growth and in the process improve your Financial Situations using the tools we are trained with. Some Advisors are better than others. The truly good Advisors have secured knowledge from intense self study from multiple Tax, Finance, and Law Skills combined. Your Community and Credit Market Investors are rewarded for hiring Advisors who do have the relationships and who can fund deals quickly. It’s not a a simple subject. But for today? You learned some basics to get you asking some questions and how the basics work for Structured Finance and Securitization. And that was my goal. Thank you for dropping by, If you would like for me to include something here in the post? Let me know! Until next time?
Good Night and Good Luck! JS.