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Zero prepayment assumption |
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Zero prepayment assumptionThe assumption of payment of scheduled principal and interest with no payments.Zero prepayment assumption Similar MatchesFHA prepayment experienceFHA prepayment experienceThe percentage of loans in a pool of mortgages outstanding at the origination anniversary, based on annual statistical historic survival rates for FHA-insured mortgages. Prepayment penaltyPrepayment penaltyA fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. Prepayment feePrepayment feeIn the US, a fee charged to a borrower by a lender when a loan or mortgage is repaid ahead of schedule. In the UK, building societies impose a similar charge, typically binding the borrower to at least three years of repayments if such a charge is to be avoided. Lag response of prepaymentsLag response of prepaymentsA delay of typically about three months between the time the weighted-average coupon of an MBS pool crosses the threshold for refinancing and observation of an acceleration in prepayment speed is observed. Prepayment speedPrepayment speedAlso called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. Further SuggestionsPrepayment penaltyPrepayments |
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