Dictionary

overcollateralization en · NOUN

Etymology

From over- + collateralization.

Meanings

1. (countable, uncountable) The act or process of overcollateralizing.
   • The specific requirements for overcollateralization can vary depending on the type of loan or financial arrangement. Lenders often assess the risk profile of borrowers to determine the appropriate level of overcollateralization needed. For example, in mortgage-backed securities, the overcollateralization ratio may be higher to account for the potential volatility in the housing market. 2024 January 28, Michael Taylor, “What Is Overcollateralized and How Does It Work?”, in Shifting Shares:

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