Undercollateralization. Because losses on a mortgage loan may be allocated in part to the subordinated component classes of a different group, the scheduled principal balance of a pool’s target-rate strip could differ from the aggregate principal balance of the related group’s target-rate classes. If the scheduled principal balance of a pool’s target-rate strip is less than the aggregate principal balance of the related group’s target-rate classes, the group will be undercollateralized by the amount of the difference; conversely, if the scheduled principal balance of a pool’s target-rate strip is more than the aggregate principal balance of the related group’s target-rate classes, the group will be overcollateralized by the amount of the difference. If a group is undercollateralized, the normal distribution rules will be adjusted as follows:
Appears in 15 contracts
Samples: Pooling Agreement (Citicorp Mortgage Securities Inc), Pooling Agreement (Citicorp Mortgage Securities Inc), Pooling Agreement (Citicorp Mortgage Securities Inc)
