135. You are working with a pool of 1,000 mortgages. Each mortgage is for $100,000 and...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6645b0c1c6d75_2656645b0c1065bb.jpg)
Transcribed Image Text:
135. You are working with a pool of 1,000 mortgages. Each mortgage is for $100,000 and has a stated annual interest rate (nominal) of 6.00%. The mortgages are all 30-year fixed rate fully amortizing. Mortgage servicing fee is an annual 0.25% of the mortgage balance charged on monthly basis as a percentage of the mortgage balance at the beginning of the month. a) Complete the following table: Beginning Required Month Balance Payment 1 100,000,000 Interest 500,000 2 Expected Servicing Fee Principal Prepayment 99,551 16,665 33,322 Ending Balance 99,750,430 b) Compute cash flows to investors for the first two months. 136. A pool of morgages has a value of $100 million. All mortgages in the pool have an interest rate of 9%, term of 30 years and fixed monthly payments. Model cash flows from this mortgage pool for the first 12 months assuming that prepayment speed is characterized by the constant single monthly mortality of 0.1% of the remaining mortgage balance by creating a table with the following columns: (1) month, (2) beginning mortgage balance (BMB), (3) payment (PMT), (4) Interest paid (Int), (5) Principal reduction (PrRed), (6) remaining mortgage balance (RMB), (7) principal prepayment (PrPrep), (8) ending mortgage balance (EMB), (9) cash flow (CF). Assume no servicing fee. 135. You are working with a pool of 1,000 mortgages. Each mortgage is for $100,000 and has a stated annual interest rate (nominal) of 6.00%. The mortgages are all 30-year fixed rate fully amortizing. Mortgage servicing fee is an annual 0.25% of the mortgage balance charged on monthly basis as a percentage of the mortgage balance at the beginning of the month. a) Complete the following table: Beginning Required Month Balance Payment 1 100,000,000 Interest 500,000 2 Expected Servicing Fee Principal Prepayment 99,551 16,665 33,322 Ending Balance 99,750,430 b) Compute cash flows to investors for the first two months. 136. A pool of morgages has a value of $100 million. All mortgages in the pool have an interest rate of 9%, term of 30 years and fixed monthly payments. Model cash flows from this mortgage pool for the first 12 months assuming that prepayment speed is characterized by the constant single monthly mortality of 0.1% of the remaining mortgage balance by creating a table with the following columns: (1) month, (2) beginning mortgage balance (BMB), (3) payment (PMT), (4) Interest paid (Int), (5) Principal reduction (PrRed), (6) remaining mortgage balance (RMB), (7) principal prepayment (PrPrep), (8) ending mortgage balance (EMB), (9) cash flow (CF). Assume no servicing fee.
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
QUESTION 6 Consider the following two projects: Year 0 Year 1 Year 2 Year 3 Year 4 Project CF CF CF CF CF Cost of capital A -110 50% 50 60 10 15% B -73 30 30 30 30 15% The IRR of project A is 17.7%...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Consider the following information: Rate of Return if State Occurs State of Economy Boom :57 Bust of Economy .66 .34 Probability of State Stock A .09 .13 Stock B Stock C .03 .19 .24 -.04 a. What is...
-
This is similar to Section 2.2 Problem 28: Use algebraic simplifications to find the limit. Use a fraction. 2x-6 lim x+3x-9 =
-
What is a sex pilus and which cell type, F or F+, would produce this structure?
-
A friend says to you, I dont understand how taxable temporary differences can be liabilities and how deductible temporary differences can be assets. It seems to me that these temporary differences...
-
Think of a time when you delegated or transferred responsibility to someone else and the outcome was not what you wanted or expected. What went wrong? Consider the four elements of empowerment...
-
Applying the capital lease criteria. Boeing manufactures a jet aircraft at a cost of $50 million. The usual selling price for this aircraft is $60 million, and its typical useful life is 25 years....
-
MARIETTA Co. adopted a standard cost system several years ago. The standard costs for the prime costs of its single product follow: Material: 10 kg @ P4.50/kg Labor: 6 hours @ P8.50/hr P45.00 P51.00...
-
Nike 2004 create an SBU analysis based on annual report. where which increased investments maintain current investments, divest of curren investments (get rid of lines) what is the business level...
-
Attached are the two copies of the statement. Your assignment is to read the statement (it is not too long) very carefully, and in one-page maximum, write an assessment of the stakeholder vs...
-
Calculate the Electric potential (V) due to an electron at distance 7.5 mm from any source: (Given K=8.99x10 Nm2C-2 and charge of electron is q = 1.6x10-19 C.)
-
The average trailing PE ratio of publicly traded auto parts companies in the US is 20.0. You own a regional auto parts firm in the Northwest that is privately held and has no debt. In the last year,...
-
You need to calculate the completed and removed from WIP Inventory - Mixing. Costs in beginning WIP inventory $1,700 Additional costs to finish units in beginning WIP inventory $400 Costs of units...
-
An electron is separated from a proton by a distance of 0.53 A. What is the valu of electric field at the location of the electron?
-
A system of loads acting on a beam is shown in figure.Determine the resultant of the loads. 20KN 30KN 20KN A 3m-
-
From 1970 to 1990, Sri Lanka's population grew by approximately 2.2 million persons every five years. The population in 1970 was 12.2 million people.What is the best formula for P, Sri Lanka's...
-
Chandler Company sells its product for \($100\) per unit. Variable manufacturing costs per unit are \($40,\) and fixed manufacturing costs at the normal operating level of 12,000 units are...
-
Which method, absorption or variable costing, is used for internal management reporting purposes?
-
During its first year, Walnut, Inc., showed an \($18\) per-unit profit under absorption costing but would have reported a total profit \($16,000\) less under variable costing. If production exceeded...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App