Consider a primary mortgage market lender who has just now originated 1,000 30-year, monthly payment loans for $300,000 each at 5.5% interest. The lender wishes to sell the pool of mortgages as mortgage pass through securities (MPTS). Investors are demanding a 4.875% yield on the MPTS backed by the pool. A servicing firm is willing to service the loans in the pool for 0.5% annually (paid monthly) and the pool is expected to prepay based on the 100% PSA prepayment model.

What is the market value of the pool?

What gross amount would the lender receive from the sale of the MPTS if the expected prepayment was forecast using a 200% PSA prepayment model?