Early Amortization

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Dictionary Says

Definition of 'Early Amortization'

A type of credit enhancement used in certain asset backed securities (ABS). Early amortization is an accelerated payment of bond principal in an asset-backed security, usually triggered when there is a sudden increase in delinquencies in the underlying loans or when excess spread, the issuer's net profit after deducting servicing fees, charge-offs and other costs, falls below an acceptable level. Also called a payout event.
Investopedia Says

Investopedia explains 'Early Amortization'

Early amortization signals liquidity crisis for the originator, as funding dries up. The early payout protects investors from prolonged exposure to receivables with deteriorated credit performance. However, the investor is relying on the fixed  income from the ABS - prepayment is an inherent risk for investors.
Search results for

'Early Amortization'

  • Substantially Equal Periodic Payment (SEPP): Learn The Rules

    http://www.investopedia.com/articles/retirement/02/112602.asp
    ... One of the exceptions to the early-distribution penalty is taking assets ... These methods
    are the following: Amortization Method Under this method, the annual ...

  • Be Mortgage-Free Faster

    http://www.investopedia.com/articles/pf/07/acceleratedpayments.asp
    ... Early in the amortization schedule, a large percentage of the total payment is interest,
    and a small percentage of the total payment is principal. ...

  • Mortgage Basics: The Amortization Schedule | Investopedia

    http://www.investopedia.com/university/mortgage/mortgage4.asp
    ... example of a $100,000, 30-year mortgage, the complete amortization schedule would ...
    principal and interest payments reverses over time as early payments consist ...

  • Borrowing From Your Retirement Plan

    http://www.investopedia.com/articles/retirement/03/070203.asp
    ... The amortization schedule provides the repayment schedule and repayment amount,
    including ... furthermore, if you are under age 59.5, early-distribution penalties ...

  • Choose Your Monthly Mortgage Payments

    http://www.investopedia.com/articles/pf/07/mortgage-payments.asp
    ... advise borrowers to minimize their mortgage payments early in life and invest the
    difference between an interest-only or negative amortization mortgage payment ...

  • 4 Steps To Picking A Stock

    http://www.investopedia.com/articles/stocks/09/screening-stocks-for-investing.asp
    ... enterprise value to earnings before interest, taxes, depreciation and amortization
    (EV/EBITDA ... He feels comfortable with an early-stage company that offers high ...

  • Payment Option ARMs: A Ticking Time Bomb?

    http://www.investopedia.com/articles/mortgages-real-estate/08/payment-option-ARM.asp
    ... Payment Option ARMs Payment option ARMs (POA) are negative amortization mortgages
    originally designed for and marketed in the early 1980s to borrowers with ...

  • Once substantially equal periodic payments (SEPP) of an IRA have ...

    http://www.investopedia.com/ask/answers/05/iraSEPPs.asp
    ... However, you can avoid the early-withdrawal penalty by taking assets under a ... However,
    with both the amortization and annuitization methods, the interest rates ...

  • Financial Statements: Earnings | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements4.asp
    ... By including depreciation and amortization, EBIT counts the cost of making
    long-term ... includes a line for the "discount (premium) on the early retirement of ...

  • Profit From Mortgage Debt With MBS

    http://www.investopedia.com/articles/06/mortgagebackedsecurities.asp
    ... Planned Amortization Class (PAC) Tranche PAC tranches use the sinking fund concept ...
    is established to absorb excess principal as mortgages are paid off early. ...

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