问题如下：
In auto loan ABSs,
the form of credit enhancement that most
likely serves as the first line of loss protection is the:
选项：
A. excess spread
account.
B. sequential pay
structure.
C. proceeds from
repossession sales.
解释：
A is correct. In addition to a senior/subordinated (sequential pay) structure, many auto loan ABSs are structured with additional credit enhancement in the form of overcollateralization and a reserve account, often an excess spread account. The excess spread is an amount that can be retained and deposited into a reserve account that can serve as a first line of protection against losses.
B is incorrect because in an auto loan ABS, losses are typically applied against the excess spread account and the amount of overcollateralization before the waterfall loss absorption of the sequential pay structure.
C is incorrect because in auto loan ABSs,
proceeds from the repossession and resale of autos are prepayment cash flows rather than a form of
credit enhancement for loss protection.
