Given the following information on a MPT, what is the anticipated total cash flow available to investors in year 2? Round your answer to two decimals. (Note: You can perform this calculation with the spreadsheet or by completing it iteratively) •

Homework 3

Question 1 Given the following information on a MPT, what is the anticipated total cash flow available

to investors in year 2? Round your answer to two decimals. (Note: You can perform this calculation with the spreadsheet or by completing it iteratively)

•    10 year FRM, fully amortizing, annual payments

•    10% CPR assumption

•    100 loans in the pool

•    Average starting balance of $350,000/loan

•    Mortgage rate 5%, annual

•    No servicing/guarantee fees

                              Use the Excel template that is part of the assignment to answer this question.

Question 2 Given the following information on a MPT, what is the servicing fee in year 3? Round your answer to two decimals. (Note: You can perform this calculation with the spreadsheet or by completing it iteratively)

•    10 year FRM, fully amortizing, annual payments

•    No prepayment or default

•    100 loans in the pool

•    Average starting balance of $350,000/loan

•    Mortgage rate 5%, annual

•    Servicing fee of 0.5% of the period’s starting outstanding pool balance

Use the Excel template that is part of the assignment to answer this question.

Question 3 Given the following information of the mortgage pool that backs a MPT, what is the regular scheduled payment in month 1 of the security? Use WAC as the mortgage rate and WAM as the number of periods for your calculations. Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 4%

•    Servicer/Guarantee fee: 0.55%

•    Starting pool balance: 250,342,967

•    Prepayment assumption: 75% PSA

•    WAM: 357 (Loans seasoned for 3 months before entering pool)

Question 4 Given the following information of the mortgage pool that backs a MPT (same as Question 3), what is the dollar amount of prepayment in month 1 of the security? Remember PSA is calculated based of month of the mortgage, not the security. Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 4%

•    Servicer/Guarantee fee: 0.55%

•    Starting pool balance: 250,342,967

•    Prepayment assumption: 75% PSA

•    WAM: 357 (Loans seasoned for 3 months before entering pool)

Question 5 Given the following information of the mortgage pool that backs a MPT (same as Question 3), what is the total cash flow of the pool (i.e. to the issuer/SPV) in month 1 of this security? Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 4%

•    Servicer/Guarantee fee: 0.55%

•    Starting pool balance: 250,342,967

•    Prepayment assumption: 75% PSA

•    WAM: 357 (Loans seasoned for 3 months before entering pool)

Question 6 Given the following information of the mortgage pool that backs a MPT (same as Question 3), what is the total cash flow of investors in month 1 of this security? Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 4%

•    Servicer/Guarantee fee: 0.55%

•    Starting pool balance: 250,342,967

•    Prepayment assumption: 75% PSA

•    WAM: 357 (Loans seasoned for 3 months before entering pool)

Question 7 Given the following information of the mortgage pool that backs a MPT (same as Question 6), what is the month 1 ending/month 2 starting pool balance for this security? Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 4%

•    Servicer/Guarantee fee: 0.55%

•    Starting pool balance: 250,342,967

•    Prepayment assumption: 75% PSA

•    WAM: 357 (Loans seasoned for 3 months before entering pool)

Question 8 Given the following information of the mortgage pool that backs a MPT, what is the dollar amount of prepayment in month 32? Round your final answer to two decimals.

•    30 year FRM, fully amortizing, monthly payments

•    WAC: 5%

•    Servicer/Guarantee fee: 0.5%

•    Prepayment assumption: 300% PSA

•    Loans were not seasoned before entering the pool

•    MBS has been active for a few years in collecting payments from borrowers and making payments to investors

•    It’s currently month 32 in the pool

•    Starting pool balance at month 32: $52, 234, 988