Appendix Chart 1. A Simplified Overview of the Securitization Process
A flow chart. At the top is the originator/seller. Assets flow from the originator/seller to the special-purpose entity; cash for the purchase of assets flows from the special-purpose entity to the originator/seller. Assets flow from the special-purpose entity to the qualified special-purpose entity/trust; cash for the purchase of assets flows from the qualified special-purpose entity/trust to the special-purpose entity. The servicer and trustee are connected to the qualified special-purpose entity/trust on the same level. Assets flow from the qualified special-purpose entity/trust to asset-backed securities, which receive input from credit enhancement. Cash flow from assets goes to investors, and cash for the purchase of asset-backed securities goes from investors to the qualified special-purpose entity/trust.