Grantor Trust
Grantor trusts are typically used in automobile-backed securities and REMICs (Real Estate Mortgage Investment Conduits). Grantor trusts are very similar to pass-through trusts used in the earlier days of securitization. An originator pools together loans and sells them to a grantor trust, which issues classes of securities backed by these loans. Principal and interest received on the loans, after expenses are taken into account, are passed through to the holders of the securities on a pro-rata basis.
Read more about this topic: Securitization, Special Types of Securitization
Famous quotes containing the word trust:
“We need not fear excessive influence. A more generous trust is permitted. Serve the great. Stick at no humiliation. Grudge no office thou canst render. Be the limb of their body, the breath of their mouth. Compromise thy egotism.”
—Ralph Waldo Emerson (1803–1882)