medium · Asset-Backed Securities
In the event of a lessee default in an operating lease ABS, why is repossession typically faster than in a secured auto loan transaction?
- Equipment leases usually include a 'speed-of-recovery' clause mandated by the SEC.
- The lessor (trust) already retains legal title to the equipment in a true lease structure.
- Lessees of commercial equipment are not protected by bankruptcy stay provisions.
- Federal maritime laws allow for 'self-help' repossession of all commercial equipment.
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