Although, as has already been mentioned, the industry`s familiar reference to « buy-back contracts » is used as a generic term to mean both a « buy-back contract » and an « investment contract, » the bankruptcy code contains a specific definition of each safe and specific port for each. In order for such an agreement to benefit from the benefits of the safe-harbor agreement granted under the Bankruptcy Act for this type of agreement, it must strictly adhere to the current definition. However, there are two main differences: [ii] Some common credit events are a default of the underlying mortgage, the acquired asset, which is no longer eligible under the repurchase facility, or an insolvency event that occurs with respect to the underlying borrower. Over the past decade, the use of storage facilities for pension operations has increased significantly. These types of specific facilities need to be carefully structured, but they have a number of benefits that are not available for other types of storage facilities. A buy-back facility (« buyout facility ») is a financing agreement under which a bank or other credit institution (a « buyer ») provides liquidity to a business that acquires or acquires real estate assets (a « seller ») by acquiring such assets with simultaneous agreement that the seller repurchases the assets at a later date. A repurchase facility can be used to aggregate mortgages or other eligible assets created by a seller prior to a securitization takeover, or a repurchase facility could be used to provide financing to a static pool up to the mortgage maturity date. Inventory loans are commercial loans based on assets. According to Barry Epstein, a mortgage consultant, bank supervisors generally treat stock loans as lines of credit that give them a 100% risk-weighted classification.

Epstein proposes that credit listing storage lines be classified in this way, in part because the time risk is days, while the time-risk risk for mortgages is in years. In essence, shelters allow a repo-taker facing a bankrupt seller to exercise a certain number of rights and protect funds already received in a way that is not available for an unsecured agreement. For example, a pension taker facing a bankrupt seller may do so under section 555 of the Bankruptcy Act (applicable for securities contracts) and section 559 of the Bankruptcy Act (which applies to pension transactions): warehouse credits are not mortgages. A stock line of credit allows a bank to finance a loan without using its own capital. The repayment of inventory lines of credit is provided by lenders by fees for each transaction, in addition to charges when credit investors reserve guarantees. The fall in the housing market between 2007 and 2008 significantly affected storage credits. The mortgage market dried up because people could no longer afford to own a home. As the economy recovered, the acquisition of mortgages increased, as did storage credits. Storage credits can simply be seen as a way for a bank or similar institution to make funds available to a borrower without using their capital.