Question: Please answer both questions completely thank you question 1 Consider a sequential pay CMO that is backed by 6 0 mortgages with average balance of
Please answer both questions completely thank you
question
Consider a sequential pay CMO that is backed by mortgages with average balance of $ each. The mortgages have monthly payments with WAM years and WAC There is a servicing fee of and prepayment is according to PSA. There are two tranches in this CMO: tranch A issued for $ and tranche B issued for $ How much cash flow do investors in tranche A receive in the first month?
question
Use the same CMO as in the previous question and suppose that in month the beginning balance on tranche A is $ and the beginning balance on tranche B is $ How much cash flow do investors in tranche A receive in month
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