The following question refers to the securitization transaction “CMLTI 2006-NC2”
ID: 1198301 • Letter: T
Question
The following question refers to the securitization transaction “CMLTI 2006-NC2” which is discussed in the FCIC report and in the FCIC resource library.
In 2006, New Century Financial, a California-based lender, originated and sold 4,499 subprime mortgages to Citigroup, which sold them to a separate legal entity that Citigroup sponsored that would own the mortgages and issue the tranches. The entity purchased the loans with cash it had raised by selling the securities these loans would back. The entity had been created as a separate legal structure so that the assets would sit off Citigroup’s balance sheet, an arrangement with tax and regulatory benefits. The securities issued were guaranteed by Fannie Mae.
T and F
Explanation / Answer
True.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.