Question

QUESTION 3

1. 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. (Write the exact answer and answer is NOT 125516.96)

   • 30 year FRM, fully amortizing, monthly payments

   • Loans seasoned for 3 months before entering pool

   • WAM: 357

   • WAC: 4%

   • Servicer/Guarantee fee: 0.55%

   • Starting pool balance: 250,342,967

   • Prepayment assumption: 75% PSA

Answer 1

Answer)

Given

Starting pool balance	250342967
No. of years of mortgage	30 Years
No. of month	12 Months
WAC	4%
Gurantee Fee	0.55%

Principal Payment in 1 month = Starting pool balance / (no. of years of mortgage x no. of month)

= 250342967 / (30 x 12)

= 250342967 / 360

= 695397.13

Interest Payment in 1 month = Starting pool balance x (WAC - Gurantee Fee) / no. of month

= 250342967 x (4% - 0.55%) / 12

= 250342967 x 3.45% / 12

= 719736.03

Total Payment = Principal + Interest

= 695397.13 + 719736.03

= 1415133.16

The regular scheduled payment in month 1 of the security 1415133.16