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Consider a primary mortgage market lender who has just now originated 1,000 30- year, monthly payment loans for $800,000 each at 5.25% interest with each

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Consider a primary mortgage market lender who has just now originated 1,000 30- year, monthly payment loans for $800,000 each at 5.25% interest with each borrower paying 1 point at origination. The lender wishes to sell the pool of mortgages as a mortgage pass through security (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 mortgage company receive from the origination of the loans and the sale of the MPTS in the previous problem if the expected prepayment was forecast using a 200% PSA prepayment model? Recall that the 200% PSA model simply means that the monthly prepayment rates are doubled. Consider a primary mortgage market lender who has just now originated 1,000 30- year, monthly payment loans for $800,000 each at 5.25% interest with each borrower paying 1 point at origination. The lender wishes to sell the pool of mortgages as a mortgage pass through security (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 mortgage company receive from the origination of the loans and the sale of the MPTS in the previous problem if the expected prepayment was forecast using a 200% PSA prepayment model? Recall that the 200% PSA model simply means that the monthly prepayment rates are doubled

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