Which of the following is NOT a factor that may cause the prepayment risk on a pool of mortgages to differ from the PSA's assumed pattern?
A)The age of the mortgage pool.
B)Geographic location.
C)Seasons in the year in which the mortgage was originated.
D)Full or partial amortization of the payments.

Question

Quizplus · Accepted Answer

The PSA assumes a constant prepayment rate (CPR) throughout the year, so the season in which the mortgage was originated would not affect the prepayment risk. However, factors such as the age of the mortgage pool, geographic location, and full or partial amortization of payments can all affect prepayment risk.

Which of the Following Is NOT a Factor That May