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PSA Prepayment Model
The PSA Prepayment Model is a prepayment scale developed by the Public Securities Association in 1985 for analyzing American mortgage-backed securities A mortgage-backed security (MBS) is a type of asset-backed security (an 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment ba .... The PSA model assumes increasing prepayment rates for the first 30 months after mortgage origination and a constant prepayment rate thereafter. This approximates real-world experience that during the first few years, mortgage borrowers: * are less likely to relocate to a different home, * are less likely to refinance into a new mortgage, and * are less likely to make extra payments of principal. The standard model (also called "100% PSA") works as follows: Starting with an annualized prepayment rate of 0.2% in month 1, the rate increases by 0.2% each month, until it reaches 6% in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Prepayment Of Loan
Prepayment is the early repayment of a loan by a borrower, in part or in full, often as a result of optional refinancing to take advantage of lower interest rates.Lemke, Lins and Picard, ''Mortgage-Backed Securities'', Chapter 4 (Thomson West, 2013 ed.). In the case of a mortgage-backed security (MBS), prepayment is perceived as a financial risk—sometimes known as "call risk"—because mortgage loans are often paid off early in order to incur lower interest payments through cheaper refinancing. The new financing may be cheaper because the borrower's credit has improved or because market interest rates have fallen; but in either of these cases, the payments that ''would have been made'' to the MBS investor would be above current market rates. Redeeming such loans early through prepayment reduces the investor's upside from credit and interest rate variability in an MBS, and in essence forces the MBS investor to reinvest the proceeds at lower interest rates. If instead the borrower's ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Public Securities Association
The Bond Market Association (TBMA, previously Public Securities Association or PSA until 1997) was the international trade association for the bond market industry. It had headquarters in New York City and offices in London and Washington, D.C. Twenty per cent of the membership was located outside the United States, while 70 per cent was located outside New York City. TBMA acted as a global voice for bond issuers and traders, and co-ordinated with governments, corporations, and investors. It also had a code of ethics, which required members to behave in a fashion of fairness. On November 1, 2006, The Bond Market Association merged with the Securities Industry Association to form the Securities Industry and Financial Markets Association The Securities Industry and Financial Markets Association (SIFMA) is a United States industry trade group representing securities firms, banks, and asset management companies. SIFMA was formed on November 1, 2006, from the merger of the Bond Mar ... ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mortgage-backed Security
A mortgage-backed security (MBS) is a type of asset-backed security (an 'instrument') which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals (a government agency or investment bank) that securitizes, or packages, the loans together into a security that investors can buy. Bonds securitizing mortgages are usually treated as a separate class, termed residential; another class is commercial, depending on whether the underlying asset is mortgages owned by borrowers or assets for commercial purposes ranging from office space to multi-dwelling buildings. The structure of the MBS may be known as "pass-through", where the interest and principal payments from the borrower or homebuyer pass through it to the MBS holder, or it may be more complex, made up of a pool of other MBSs. Other types of MBS include collateralized mortgage obligations (CMOs, often structured as real estate mortgage investment conduits) and collatera ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Relocation (personal)
Relocation, also known as moving, or moving house, is the process of leaving one's dwelling and settling in another. The new location can be in the same neighborhood or a much farther place in a different city or different country (immigration). It usually includes packing all belongings, transferring to the new home, unpacking, and administrative or bureaucratic tasks, such as changing registration data. An expatriate is an individual temporarily or permanently relocating to a country other than their native country. The individual relocating would be considered an immigrant in their new country. Psychological effects On the Holmes and Rahe stress scale for adults, "change of residence" is considered a stressful activity, assigned 20 points (with the death of a spouse being ranked the highest at 100), although other changes on the scale (e.g., "change in living conditions", "change in social activities") often occur as a result of relocating, making the overall stress level pote ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Fixed Income Analysis
Fixed income analysis is the process of determining the value of a debt security based on an assessment of its risk profile, which can include interest rate risk, risk of the issuer failing to repay the debt, market supply and demand for the security, call provisions and macroeconomic considerations affecting its value in the future. It also addresses the likely price behavior in hedging portfolios. Based on such an analysis, a fixed income analyst tries to reach a conclusion as to whether to buy, sell, hold, hedge or avoid the particular security. Fixed income products are generally bonds: debt instruments requiring the issuer (i.e. the debtor or borrower) to repay the lender the amount borrowed (principal) plus interest over a specified period of time (coupon payments) until maturity. They are issued by government treasuries, government agencies, companies or international organizations. Calculating Value To determine the value of a fixed income security, the analyst mus ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
