A mortgage pool was created six years ago. Which one of the following PSA values is most likely to apply to that pool if market mortgage rates have been declining very rapidly over the past five years?

Question

Quizplus · Accepted Answer

When market mortgage rates decline rapidly, prepayment speeds typically increase as borrowers refinance to take advantage of lower rates. A PSA value of 200 indicates a prepayment speed that is twice the standard benchmark, which is likely in such a scenario.

A Mortgage Pool Was Created Six Years Ago