Who buys those packages and in addition the purchase quickly to the Bank of? Illnois. clean your Balance immediately? Very good question! The Bank of Illinois created a few subsidiaries entities, the conduits, which are not corporations, but trusts or funds, and therefore are not required to consolidate their balance sheets with the parent bank. I.e., suddenly appear in the market two types of entities: i. the Bank of Illinois, with the face clean ii. The Chicago Trust Corporation (or the name that want you to consider), with the following balance sheet: 10 packages of mortgages Capital assets liabilities: what has been paid for those packages 3rd. comment: If anyone who works in the savings of San Quirze, from the President to the Director of the Office knew something of this, quickly look for another job. Meanwhile, everyone is talking about in expanding its international investments, of which you see that they do not have the slightest idea. How are conduits financed? In other words, where do they get money to buy packages of mortgages to the Bank of Illinois? Multi-site: through loans from other banks (4Th comment: the ball is getting bigger) Hiring the services of investment banks that they can sell these MBS to investment funds, Venture Capital, insurance, financial, patrimonial companies of a family, etc.
(5th comment: look that the danger is us getting closer, not to Spain, but to our family, because like, animated by the Director of the Office of San Quirze, go and put my money in an investment fund) what happens is thatto be financially correct, conduits or MBS had to be well rated by rating agencies, which give scores based on solvency. These ratings say: this company in this State, this organization is can lend money without risk, or be careful with these others because you not being paid risk.