Financial Asset Securitization Investment Trust - FASIT

You've probably heard of mortgage-backed securities (they hit it big around 2007). They involve bundling a bunch of mortgage loans together and selling them as a security.

An investor can buy an MBS and make money on a group of mortgages. The securities allow people to invest in mortgages without having to loan money to homeowners. Meanwhile, they allow banks to securitize and sell off some of their risk. And because they include a bunch of mortgages, they offer some diversification (unless the entire market collapses).

A Financial Asset Securitization Investment Trust works on a similar premise. Except in the case of a FASIT, the security isn't backed by long-term mortgage loans. Instead, the debts getting securitized include shorter-maturity loans with collateral other than a home (or sometimes with no collateral at all).

FASITs might bundle together car loans or personal loans. Or the trusts could include no-collateral debt, like those from credit card companies. The goal again is to allow the selling of risk by the companies issuing the debt, and to provide a new type of investment for potential buyers.