Default

In securitisation, default happens when a borrower stuffs up a payment on a loan or other debt obligation that is part of the securitisation. When this happens, the investors in the securitisation might lose money.

There are a number of factors that can lead to default in securitisation, including:

- The borrower's financial situation might get worse, making it difficult for them to make payments.
- The borrower might experience a change in circumstances, such as a job loss or a medical emergency, that makes it difficult for them to make payments.
- The borrower might simply choose not to make payments.