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Bankers then sold financial instruments backed by that pool to investors.
That is, markets in stuff that is normally traded all the time — in particular, financial instruments backed by home mortgages — have shut down because there are no buyers.
Chartered by the federal government in 1988, Farmer Mac buys mortgages on farmland from agricultural lenders and then sells instruments backed by those loans.
DealBook » Trouble in European Commercial Mortgage Securities | The Financial Times reports: "Defaults among financial instruments backed by European commercial mortgage payments have more than doubled, highlighting the widespread problems facing the region's moribund commercial property market".
In the UK, where the housing crash began much later, prices have so far fallen by "only" 18%; but losses on corporate property, as well as heavy exposure to bets on toxic instruments backed by sub-prime US loans and domestic mortgages, have left banks on the brink of disaster.
And by permitting investment banks to post collateral for Fed loans, including hard-to-sell financial instruments backed by mortgages, the programs have helped prop up the enormous and troubled market in securities sold by Fannie Mae and Freddie Mac, the all-important mortgage-finance companies.
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A covered bond is a securitized debt instrument backed by a pool of high-quality assets, usually mortgages.
"The idea here is that if underwriters can determine a predictable savings from retrofits," he said, "then they can create a financial instrument backed by these savings to sell on the open market".
In addition, buyers are eligible for "location efficient" mortgages, a two-year-old mortgage instrument backed by Fannie Mae, the nation's leading buyer of home loans, which enables buyers who use public transportation or have only one car to qualify for larger loans.
See, Furlenco is now essentially a financial instrument backed by physical collateral.
(The two men, in addition to playing assorted instruments, are backed by a three-piece band).
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