Assume the following parameters:

Original principal $100,000

Loan term (years) 30

Payments/year 12

Annual interest rate 10%

Assume both A and B make monthly payments

Borrower A: Borrows $100,000 at 10% for 30 years, but the rate is adjustable after 1 year.

Borrower B: Borrows $100,000 at 10% for 30 years with a conventional fixed rate of 10%

At the end of month 12, the annual rate adjusts to 9.5% for borrower A. Calculate the new payments.

At the end of month 12, borrower B can refinance the mortgage at the annual rate of 9%. Calculate the value (savings) of refinancing the mortgage.

For a non-Agency RMBS, list one credit enhancement.

Original Principal Loan term years) Annual interst rate Payments per year Payment 100,000 $877.57 Amortization schedule Period 1 Opening balance $100,000.00 $99,955.76 S99,911.15 $99,866.18 S99,820.82 $99,775.09 S99,728.98 $99,682.48 $99,635.610 $99,588.32 S99,540.65 $99,492.59 $99,444.12 $99,395.25 $99,345.97 $99,296.28 $99,246.18 $99,195.66 $99,144.72 $99,093.36 $99,041.56 $98,989.34 $98,936.68 $98,883.58 $98,830.04 $98,776.05 S98,721.61 $98,666.7.2 $98,611.37 $98,555.56 Inter $833.33 $832.96 $832.59 $832.22 $831.84 $831.46 $831.07 $830.69 $830.30 $829.90 $829.51 $829.10 $828.70 $828.29 $827.88 $827.47 S827.05 $826.63 $826.21 $825.78 $825.35 $824.91 $824.47 $824.03 $823.58 $823.13 $822.68 $822.22 $821.76 $821.30 Principal Payment $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 Ending Balance S99,955.76 S99,911.15 S99,866.18 $99,820.82 S99,775.09 S99,728.98 S99,682.48 $99,635.60 S99,588.32 S99,540.65 $99.492.59 $99,444.12 S99,395.25 S99,345.97 S99,296.28 S99,246.18 S99,195.66 S99,144.72 $99,093.36 S99,041.56 $98,989.34 S98,936.68 S98,883.58 S98,830.04 S98,776.05 S98,721.61 S98,666.72 $98,611.37 $98,555.56 S98,499.28 7 Original Principal Loan term years) Annual interst rate Payments per year Payment 100,000 $877.57 Amortization schedule Period 1 Opening balance $100,000.00 $99,955.76 S99,911.15 $99,866.18 S99,820.82 $99,775.09 S99,728.98 $99,682.48 $99,635.610 $99,588.32 S99,540.65 $99,492.59 $99,444.12 $99,395.25 $99,345.97 $99,296.28 $99,246.18 $99,195.66 $99,144.72 $99,093.36 $99,041.56 $98,989.34 $98,936.68 $98,883.58 $98,830.04 $98,776.05 S98,721.61 $98,666.7.2 $98,611.37 $98,555.56 Inter $833.33 $832.96 $832.59 $832.22 $831.84 $831.46 $831.07 $830.69 $830.30 $829.90 $829.51 $829.10 $828.70 $828.29 $827.88 $827.47 S827.05 $826.63 $826.21 $825.78 $825.35 $824.91 $824.47 $824.03 $823.58 $823.13 $822.68 $822.22 $821.76 $821.30 Principal Payment $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 $877.57 Ending Balance S99,955.76 S99,911.15 S99,866.18 $99,820.82 S99,775.09 S99,728.98 S99,682.48 $99,635.60 S99,588.32 S99,540.65 $99.492.59 $99,444.12 S99,395.25 S99,345.97 S99,296.28 S99,246.18 S99,195.66 S99,144.72 $99,093.36 S99,041.56 $98,989.34 S98,936.68 S98,883.58 S98,830.04 S98,776.05 S98,721.61 S98,666.72 $98,611.37 $98,555.56 S98,499.28 7