The amortised balance outstanding of the insured securities, net of any reinsurance. The securities amortise periodically, typically monthly, from the collection of scheduled interest and principal and from prepayments of principal on the underlying collateral. The amount of securities of a particular issue originally insured by Ambac on the issue date. Ambac may insure one or more tranches of a securitization, and the amount of the collateral may be less than, equal to, or in excess of the amount insured. The current principal balance of the loans outstanding in the entire collateral pool of a transaction, divided by the original balance of such loans, expressed as a percentage.
Residential mortgages are loans made to borrowers, secured by a first mortgage on the property.
These mortgages may be made for purchase of a residence or for refinancing of an existing mortgage. These loans require regular scheduled payments of principal and interest. Some of the loans in residential mortgage pools may have an interest only period prior to the beginning of principal amortisation. The balance of a securitization of residential mortgage loans will amortise as the loans are repaid, whether on schedule or by prepayment.