What does collateral pool mean?

A collateralisation technique that enables an institution to make collateral available to a counterparty without allocating it to a specific transaction.

What is collateralization of deposits?

Collateralization is the use of a valuable asset to secure a loan. If the borrower defaults on the loan, the lender may seize the asset and sell it to offset the loss. Collateralization of assets gives lenders a sufficient level of reassurance against default risk.

What is a collateralization statement?

Collateral Statement means a statement furnished by a Sublicensee or Affiliate stating each type of Licensed Product, the aggregate amount of the Affiliate’s or Sublicensee’s (as the case may be) gross sales and net sales of the same, and the aggregate amount of returns of and allowances for such products, for a given …

How do banks collateralize deposits?

Collateralization of public deposits through the pledging of appropriate securities or other instruments (i.e. surety bonds or letters of credit) by depositories is an important safeguard for such deposits. Some states have established programs for the pooling of collateral for deposit of public funds.

What is loan pooling?

Loan Pool means: (a) in the context of a Securitization, any pool or group of loans that are a part of such Securitization; (b) in the context of a Transfer, all loans which are sold, transferred or assigned to the same transferee; and (c) in the context of a Participation, all loans as to which participating interests …

What is the difference between mortgage and collateral?

Collateral acts as an insurance policy for lenders which can be sold to recover losses when a borrower defaults on their loan. A mortgage is a loan that is taken out by keeping a real estate asset as collateral.

What is defective collateralization?

This Agreement or any Loan Document ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason or any Collateral is or becomes subject to any liens except Permitted Liens.

What are some examples of collateral?

These include checking accounts, savings accounts, mortgages, debit cards, credit cards, and personal loans., he may use his car or the title of a piece of property as collateral. If he fails to repay the loan, the collateral may be seized by the bank, based on the two parties’ agreement.

What is meant by a commercial bank?

The term commercial bank refers to a financial institution that accepts deposits, offers checking account services, makes various loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses.

Can banks cross collateralize?

Cross collateralization clauses can easily be overlooked, leaving people unaware of the multiple ways they might lose their property. Financial institutions often cross collateralize property if a customer takes out one of its loans and then follows up with other financing from that same bank.

What do banks do with public deposits?

Banks use the major portion of the deposits to extend loans. There is a great demand for loans for various economic activities. In this way, banks mediate between those who have surplus funds and those who are in need of these funds. Banks charge a higher interest rate on loans than what they offer on deposits.

What is pooling and servicing agreement?

The “Pooling and Servicing Agreement” is the legal document that contains the responsibilities and rights of the servicer, the trustee, and others over a pool of mortgage loans.

When to change the method of collateralization of public deposits?

In any event, the Public Depositor should remain informed of any changes in the Depository’s preferred method of collateralizing Public Deposits. Such a change could occur, for example, in connection with a merger between two financial institutions.

Which is the best definition of collateralization?

Collateralization is the use of an asset to secure a loan against default. The collateral can be seized by the lender to offset the loss.

When to use dedicated method or pooling method?

20 NCAC 07 .0107. Upon opening a new Deposit Account with a Depository, the Public Depositor must also determine whether the Depository uses the “dedicated method” of collateralizing Public Deposits (the “Dedicated Method”) or the “pooling method” (the “Pooling Method”).

How is margin buying based on Collateralization?

Margin buying, which means buying in part with borrowed money, is based on the use of collateral, which consists of other securities in the borrower’s account. If the investor has sufficient assets in the account, a brokerage firm will allow that investor to buy securities with borrowed money, using the assets in the account as collateral.