Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider an MPT backed by 200 mortgages with average beginning balance of $50,000. The WAC = 4% and WAM =180 with monthly payments. Assume that
Consider an MPT backed by 200 mortgages with average beginning balance of $50,000. The WAC = 4% and WAM =180 with monthly payments. Assume that there is no prepayment and no servicing fee. Using the 200% SDA model, what is the dollar amount of defaults on month 5? [Hint: the formula for converting CDR into Monthly Default Rate (MDR) is:MDR= 1(1CDR)1/12. Remember that the MDR is applied to the pool balance after the scheduled principal has been paid.]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started