TRUE SALE AS AN EFFECTIVE MECHANISM TO MITIGATE THE RISK OF BANKRUPTCY IN BANKING SECURITIZATION OPERATIONS: THE ALGERIAN SECURITIZATION SYSTEM AS A MODEL

Abstract

The paper aims to explore the extent to which true sale is realized in the procedures of mortgage loan securitization organized in Algeria according to Law 06-05. The concept of true sale relies on a set of criteria that render the securitization of mortgage loans a genuine sale of debts, leading to the complete transfer of debts from the ownership of lending banks to securitization institutions. This, in turn, results in mitigating the bankruptcy risk for any party involved in the securitization process.