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True sale is at the very heart of legal issues in securitization.
If securitization is a true sale, the investors get a legal right over the receivables. If it is not a true sale, investors may be either at par with unsecured lenders, or even worse. The genesis of securitization lies in giving the investors rights over specific assets of the originator, such that the investors are not affected by the performance, or bankruptcy of the originator. This would obviously necessitate that the investors, or the SPV which is a conduit on behalf of the investors, has legally acquired the assets. To allow investors an unqualified right over the assets being securitized.