Question: How are FICO scores used in classifying loans
How are FICO scores used in classifying loans?
Answer to relevant QuestionsWhat is an alternative-A loan? Why is an assumed prepayment speed necessary to project the cash flow of a pass-through? What is the S-curve for prepayments? Explain the reason for the shape. What are subprime mortgage-backed securities? Suppose that a savings and loan association has decided to invest in mortgage-backed securities and is considering the following two securities: (i) a Freddie Mac pass-through security with a WAM of 340 months or (ii) a PAC ...
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