Question: How does the guarantee for a Ginnie Mae mortgage backed security
How does the guarantee for a Ginnie Mae mortgage-backed security differ from that of a mortgage-backed security issued by Fannie Mae and Freddie Mac?
Answer to relevant QuestionsOn October 1, 2005, Fannie Mae issued a mortgage pass-through security and the prospectus supplement stated the following: FANNIE MAE MORTGAGE-BACKED SECURITIES PROGRAM SUPPLEMENT TO PROSPECTUS DATED JULY 01, ...Complete the following table (in thousands of dollars) assuming a prepayment rate of 165 PSA: Original balance: $ 100,000,000 Pass-through rate: 9.0% WAM: 360 months What is the bond-equivalent yield if the monthly cash flow yield is 0.7%? Although it is often stated that Ginnie Mae issues mortgage-backed securities, why is that technically incorrect? Suppose that $1 billion of pass-throughs is used to create a CMO structure with a PAC bond with a par value of $700 million (PAC I), a support bond with a schedule (PAC II) with a par value of $100 million, and a support ...
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