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The Mini Fannie just acquired a pool of 100 mortgages with average balance of $250,000 per loan. All loans in the pool are constant payment
The Mini Fannie just acquired a pool of 100 mortgages with average balance of $250,000 per loan. All loans in the pool are constant payment mortgage with 7.5% interest rate, 5-year termand annual paymentMini Fannie is going to issue 25,000 shares of mortgage pass through securities with this poolwhich pass-through pays investor once a year. Assuming there is no Servicing fee, but expect a constant prepayment rate of 10% of the beginning balance each year (except the 5th year), what is the total cash flow to investor in year 3 and 5?
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