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2011, vol. 5, iss. 1, pp. 1-22
The securitization of mortgage loans as the cause of transmission crisis on the financial market
aEducons University, Faculty of Business Economics, Sremska Kamenica
bUniversity of Novi Sad, Faculty of Economy, Subotica,,
The working paper analyzes the process of securitization of all types of mortgage loans whose conversion into securities representing ground spillover from the mortgage crisis on financial markets. The working paper explains the connection with the mortgage credit market, where special emphasis is placed on the process of securitization, credit fragmentation process in the U. S., as well as the biggest mistakes when converting mortgages into securities. We will explain the increase in financial leverage due to financial market which cause securitization process. The risk of default on mortgage loans leads to an inability of evaluation of a major asset classes of securities. The working paper also shows the role of rating agencies in the entire process of evaluation securities. Finally, the working paper shows the failure of financial institutions due to financial market crisis that is transferred through the securitization process from the mortgage market.
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article language: Serbian
document type: Original Scientific Paper
published in SCIndeks: 15/06/2011