All mortgages in the pool carry a fixed interest

Reference no: EM13237837

The Home Loan Corp, Inc (HLC) originates a pool containing 100 five year mortgages,

with an average balance of $150,000 each. All mortgages in the pool carry a fixed interest

rate of 6% (assume all payments are made annually). HLC now wishes to sell the pool of

mortgages to the FHLMC. Assuming prepayments are constant at 10% (of the mortgage pool balance at the

end of the previous year), what is the price of the pool of mortgages if prepayments fell to zero and the FHLMC wishes to obtain a rate of return equal to 9% instead?

Required minimum-1 page

Reference no: EM13237837

Questions Cloud

What is the current stock price : One year from today, investors anticipate that stock will pay a dividend of 3.25 per share

Importance of african religion prior to arrival of muslim : Describe and evaluate the importance of African religion prior to the arrival of Muslim and Christian missionaries. Then, describe the conversion efforts of both Islam and Christianity in post-classical Africa and assess the legacy of each set of eff..

How much interest will they pay in the second payment : Amanda and Blake have found a house, which owing to a depressed real estate market costs only $201500. They will put $22000 down and finance the remainder with a 30-year mortgage loan from Bank of America at 4.65% (compounded monthly).

Find the direction of electric field at the same positions : The potential in a region between x = 0 and x = 6.00 m has a linear relation, Calculate the potential at the following positions: x = 0, 3.00 m and 6.00 m and also find magnitude and direction

All mortgages in the pool carry a fixed interest : All mortgages in the pool carry a fixed interest

Define the final volume of the solution : 26.0 grams of an unknown sugar was dissolved in water and the final volume of the solution was brought up to 1.00 L. The osmotic pressure of this solution was determined to be 3.53 atm at 25°C. Which of the sugars below was most likely the unknown..

Compute the equivalent uniform annual cost during the 4 year : An electronics firm invested $60000 in a precision inspection device. It cost $4000 to operate and maintain in the first year and $3000 in each later year. At the end of 4 years, the firm changed their inspection procedure

Socially responsible leisure service providers need to have : Socially responsible leisure service providers need to have a

Calculate the home country currency rate of return : Given the SR = $2/£ , and FR90 =$1.99/£ and rUS = 5% and rUK = 8% A)Calculate r* (the home country currency rate of return). B) Would you see inward or outward interest arbitrage

User Account

All Pages