Overview of Mortgage Backed Securities Market
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About the Lecture
The lecture Overview of Mortgage Backed Securities Market by Edu Pristine is from the course Archiv - Market Risks. It contains the following chapters:
- AIM Statements
- Evolution of the MBS Market
- Types of MBS
- Loan Progress from Application to Agency Pooling
- Trading Pass Through Securities
- Dollar Roll Transaction
- Dollar Roll to Trade Special
- Pricing Mortgage Products
- Cash Flow Structuring for Investors
Author of lecture Overview of Mortgage Backed Securities Market
Edu Pristine
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Excerpts from the accompanying material
... and adjustable rate and private label MBS pools, pass-trough's, CMOs, and mortgage strips. Explain how a loan progresses from application to agency pooling. Describe MBS market structure and the ...
... to issue more loans. With the growth of MBS market, many mortgage loans of similar characteristics are grouped together. ...
... are traded based on coupon rate. Some of the interest cash flows are used for servicing and credit support payment. Guarantee fees ...
... are paid to the government agencies over the time to insure the loan. Coupons will change over ...
... No guarantee fee is involved in private label pools. In these securities, method of subordination is used ...
... Private Label Mortgage Strips. WAC IO's and WAC PO's exist only in private label market. Annual coupon rate for these securities depends upon market conditions. ...
... Agency Pooling: There are four steps involved in MBS creation. 1. Application is taken ...
... involves identifying the security and establishing a price. Actual pools are not revealed to the investor until immediately before the settlement. 3. Stipulated trade is ...
... settlement months and sells those same positions for another month at the same time. How to value a Dollar Roll. The process involves calculating the income and expenses over the holding period. ...
... roll is trading special. Factors that can cause dollar roll to trade special are: 1. Decrease in back month ...
... the MBS sector. The optimal coupon rate for a fixed rate MBS depends on the pass through prices of different coupons, base servicing fees, excess servicing fees, guarantee fees and origination fees. ...
... different reasons. These financial institutions have different cash flow needs. Because of its flexible nature, ...
