Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This is a final interview question please help me do it, thank you very much! Explain why the loan prices are different for each of

This is a final interview question please help me do it, thank you very much!

Explain why the loan prices are different for each of the 3 pairs of loans as below

image text in transcribed Pair 1: \begin{tabular}{|c|c|c|} \hline & Loan A & Loan B \\ \hline Lien Position & 1st Lien & 2nd Lien \\ \hline Loan Type & Residential Fixed-Rate & Residential HELOC \\ \hline Current Interest Rate & 6.00% & 6.00% \\ \hline Combined LTV & 65.06% & 65.06% \\ \hline Current LTV & 51.85% & 49.91% \\ \hline FICO Score & 740 & 740 \\ \hline Property Zip Code & 91708 & 91708 \\ \hline Current Loan Balance & 1,832,994 & 1,832,994 \\ \hline Loan Price & 98.59% & 78.88% \\ \hline \end{tabular} Pair 2: \begin{tabular}{|l|l|l|} \hline & Loan C & Loan D \\ \hline Lien Position & Closed-End 2nd Lien & Closed-End 2nd Lien \\ \hline Loan Type & Residential Fixed Rate & Residential Floating Rate \\ \hline Current Interest Rate & 5.99% & 5.99% \\ \hline Combined LTV & 100.00% & 20.39% \\ \hline Current LTV & 10.02% & 10.05% \\ \hline FICO Score & 810 & 780 \\ \hline Property Zip Code & 91024 & 91024 \\ \hline Current Loan Balance & 98,125 & \\ \hline Loan Price & 77.07% & 98,125 \\ \hline \end{tabular} Pair 3: \begin{tabular}{|l|l|l|} \hline & Loan E & Loan F \\ \hline Lien Position & 1st Lien & 1st Lien \\ \hline Loan Type & Multifamily ARM & Multifamily ARM \\ \hline Negative Amortization Y/N & Y & N \\ \hline Current Interest Rate & 10.25% & 9.75% \\ \hline Current LTV & 15.49% & 7.23% \\ \hline DSCR & 1.38 & 2.033 \\ \hline Property Zip Code & 90731 & 90731 \\ \hline Payment History & 00000000000 & 000000000000 \\ \hline Current Loan Balance & 948,468 & 948,468 \\ \hline Loan Price & 92.21% & 100.73% \\ \hline \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Handbook For Investment Committee Members

Authors: Russell L. Olson

1st Edition

0471719781, 978-0471719786

More Books

Students also viewed these Finance questions

Question

What length of a 7.7-mW laser's beam will contain 9.5 mJ of energy?

Answered: 1 week ago