What forms of credit enhancement are being used in both structures?
What will be an ideal response?
As with nonagency mortgage-backed securities, credit enhancement can be either insurance, corporate guarantees, or letters of credit. Internal credit enhancementsinclude reserve funds (cash reserves and excess servicing spread), overcollateralization, and senior/subordinated structures. In both structures above, senior/subordinated structures are being used.
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Negative assurance opinions mean that:
a) nothing came to the auditor's attention which indicated that the system of internal controls is ineffective. b) the auditor's scope was limited so that an opinion could not be rendered c) the auditor found a material weakness in the internal controls. d) the auditor had insufficient evidence to draw a conclusion.
___________ levied by a homeowners' association (HOA) fund the operating budget to pay for the cost of maintaining the common areas.
a. Special assessments b. Regular assessments c. Mello Roos assessments d. Extraordinary assessments