For amortizing assets, the composition of the loans is the asset pool doesn’t change once the asset is securitized For non-amortizing assets, the composition of hte asset pool does change?
I don’t get this… in my view, amortizing assets are amortizing hence changing the composition?? why is the above statement correct???
When non-amortizing assets (e.g. credit card receivables) are paid off, the trustee simply goes out and buys new receivables - hence the composition of loan pool changes. Amortizing assets like home mortgages don’t have a provision for trustees to reinvest principal.