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Real Estate Glossary

Credit enhancement

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Written by Luis Escobar

This refers to credit support required on top of the mortgage collateral. It is done to attain a desirable credit rating on mortgage-backed securities. Credit enhancement comes in the form of over-collateralization, subordination, corporate guarantees, letters of credit, and reserve funds.

This refers to credit support required on top of the mortgage collateral. It is done to attain a desirable credit rating on mortgage-backed securities. Credit enhancement comes in the form of over-collateralization, subordination, corporate guarantees, letters of credit, and reserve funds.

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Luis Escobar

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