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@diya, if an ABS uses non-tangible securities (which it normally does, e.g. auto loans, student loans etc), it needs further credit enhancement for investors/regulator to be comfortable with such securities. To do that, there are various ways, of which one is overcollateralisation. One could also obtain 3rd party guarantee on the bond performance (the US govt provided various guarantees during the financial crisis for stability), or even bond insurance, or reserve funds, or structures that have senior and subordinated debt to appropriately differentiate the risks further.
Yes MBS is a sub-class of ABS. Yup, Answer 3 does not affect the credit risk assessment of the ABS hence would be the answer.