Question
Suppose WAC for the underlying mortgage for a pass-through is 9%. The pass-through rate is 8% with a WAM of 360 months. Mortgage prepayment takes
Suppose WAC for the underlying mortgage for a pass-through is 9%. The pass-through rate is 8% with a WAM of 360 months. Mortgage prepayment takes 150PSA. The par value of the mortgage is $500 million. Assume that in month 30 the beginning balance is 337,568,221 and the total principal payment in month 30 is $2,793,137. Answer the following questions: 1. Compute the single-month mortality rate in month 31. 2. Calculate mortgage payment for month 31. 3. Calculate i) scheduled principal payment in month 31, ii) prepayment in month 31, and iii) beginning balance in month 32.
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