An obligation bond that combines the cash flow from a pool of mortgages and uses the revenue to repay investors their mortgage principal  and interest; the MCFO does not hold a lien on the properties but is required by contract to meet its obligations


An individual or company which brings borrowers and lenders together for the purpose of loan origination but which does not originate or service the mortgages. The broker might also negotiate with the lender to try and find the best possible financial deal possible for the borrower.
The points and interest rates that wholesale lenders quote to correspondent lenders and mortgage brokers

Debt Crisis

EU sovereign debt crisis/G20 FM Meeting: After months of dithering, there are tangible signs that policymakers are starting to grapple with the Eurozone sovereign debt crisis. Judging by comments last week, there seems to be a growing recognition that decisive coordinated action is needed.
EU officials are reportedly working on a plan to recapitalize the balance sheets of those banks most exposed to losses in the Eurozone periphery. Banks that fail a new round of stress tests (the third) that incorporate haircuts on their sovereign debt will be obliged to seek government funds to bolster their tier 1 capital ratios. The threshold for core tier 1 capital has yet to be agreed, although reports suggest it could be set as high as 8%.
The recapitalisation schedule is, it seems, being prepared alongside plans to increase the scale of private sector involvement in Greek restructuring - a move which would carry large risks. Moreover, tentative estimates suggest that the recapitalisation could cost €200bn. If the cost of the UK bank recapitalisation in 2008-9, however, is anything to go by, Eurozone banks could require substantially more than this. The €440bn EU bailout fund, the EFSF, could, in theory, be used to source the funds. Yet there is strong opposition to this by some countries who feel it is the responsibility of individual member states to foot the bill for recapitalizing their domestic banks.