What is the projected prepayment amount in month

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Reference no: EM131194823

Given the following information, answer the following questions for month 12 of this security

-15 year FRMs, monthly payments

-PSA 150

-4.5% mortgage rate, 0.5% servicing fee, 3.75% discount rate

- Pool balance at the beginning of month 12: $75,946,124

- The loans were not seasoned before entering the pool

A: What is the projected prepayment amount in month 12?

B: What the total interest received by the issuer in month 12?

C: What is the payment to investors in month 12?

D: If instead the WAM of loans at issuance was 178 months (i.e. the loans were seasoned for 2 months before the security was formed), what would be the prepayment in month 12 of the security?

E: If you were told that month 12 of this security corresponded to the calendar month of January (and you were told that the appropriate seasonal adjustment factor for January was 75%) would this increase or decrease the expected cash flows to investors you found in part C (2pt)? By how much?

Reference no: EM131194823

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