For example, a fund may have a securities lending agreement with its custodian which permits the custodian to loan fund securities in exchange for a reduction in custody fees.
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Landow took out a 90% loan against securities he put up as collateral.
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The model is another American innovation from the financial crisis the Term Asset-Backed Securities Loan Facility, or TALF.
On November 25, 2008, the Federal Reserve Board announced terms for the Term Asset-Backed Securities Loan Facility (TALF).
Investors in loan-backed securities could have pushed for tougher monitoring.
This connection between tax dollars and contract awards to corporations with ties to countries like Iran has been exacerbated by Washington's TARP (Troubled Asset Relief Program) and TALF (Term Asset-Backed Securities Loan Facility) outlays undertaken thus far.
Traders use stock loan desks to access securities to buy or to borrow to sell short.
The plan also offers no "safe harbor" provision to shield mortgage servicers from lawsuits by investors holding the securities backed by a loan being modified.
New Century said Tuesday that several other lenders had reported it's in default of loan agreements, adding that the Securities and Exchange Commission has requested documents and was starting an investigation.
Today's announcement by the Fed that it will purchase direct debt obligations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and also mortgage backed securities guaranteed by Fannie, Freddie and Ginnie Mae, underscores our support for the housing market.
"Mr Takenaka appears to have recovered lost ground, as the schedule sets the stage for stricter self-inspections and loan asset inspections, " a report by Mitsubishi Securities said.
The government, as owner of mortgages and mortgage-backed securities, will be allowed to make loan modifications by lowering principal and interest rates on mortgages, or extending the life of the mortgage.
The government, as owner of mortgages and mortgage backed securities, will be allowed to make loan modifications by lowering principal and interest rates on mortgages, or extending the life of the mortgage.
The percentage of riskier securities like subprime mortgages and mortgages with a loan-to-value ratio of greater than 90% skyrocketed.
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Rather than sell each loan individually, they package pools of the loans into securities, much like a mutual fund, and sell these bonds.
Nomura notes that European banks' American subsidiaries have begun to shrink their securities holdings but, so far, not their loan books.
One popular real-estate strategy, according to Anthony D'Andrea, UBS's head of securities-based lending: Use a stock-based loan to make an all cash bid for a property, then refinance into a traditional mortgage once the deal is closed.
The TALF was created by the Fed to lure capital from the sidelines to support the consumer loan market by extending credit to investors for the purchase of certain designated securities backed by student loans, auto loans, and credit card debt.
Loan servicers, which manage loans on behalf of investors in mortgage-backed securities, may fear lawsuits alleging that borrowers have been treated too generously.
But even if a liquid market in such securities could be created, it would still rely on banks with experienced loan officers to assess the credit risk of small firms.
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The Fed has also recorded a handsome profit on its emergency-lending programmes to healthy banks, as did the Treasury on its purchases of mortgage-backed securities and, so far, the Federal Deposit Insurance Corporation on bank-loan guarantees.
Some of the soured assets Beal purchased at fire-sale prices were residential mortgage-backed securities that were sold in deals in which banks made representations and warranties about loan quality and promised to repurchase those loans if the representations were no good.
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In short, investors are dealing with a new set of complex securities, based on loans to a new type of borrower, where the loan terms and conditions may not be clear and at a time when house prices are falling nationally for the first time in living memory.
Investors can typically borrow 50% to 95% of the value of the stocks and bonds they pledge, but if the value of those securities falls below a certain level, brokerages often demand investors immediately pay back the loan or pony up additional collateral.
Some are looking at the way banks packaged and sold securities that were backed by mortgages, others are looking at how defaulting homeowners were denied loan modifications and some regulators are investigating whether homeowners were forced out of the their homes improperly by so-called robo-signers.
The group proposes to lessen the risk to taxpayers through guarantee fees for mortgage-backed securities and by requiring mortgage insurance where the borrower is financing 80% or more of the loan value.
David Trone, bank analyst at JMP Securities, says traditional banking like making loans to consumers and businesses should be relatively flat as loan growth remains muted and the impact of releasing loan loss reserves continues to peter out.
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The Securities and Exchange Commission also has filed civil charges against 38 individuals, including 17 current or former stock loan traders.
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