Overcollateralization (of the home equity loan ABS)

(e.g.)
Total principal of tranches = $450 * 10⁶
Total principal of collateral = $475 * 10⁶

Overcollateralization = ($475-$450)*10⁶ = $25*10⁶

Default of collateral = $30 * 10⁶

Overcollateralization - Default of collateral
= $25*10⁶ - $30 * 10⁶
= -$5*10⁶

Principal of subordinated tranche (prior to the default)
= $54*10⁶

Principal of subordinated tranche (after the default)
= $54*10⁶-$5*10⁶
= $49*10⁶