Prepayments

Business / Finance / Prepayments: Payments made in excess of scheduled mortgage principal repayments.

Lag Response Of Prepayments

Business / Finance / Lag Response Of Prepayments: A 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 obse MORE

Company

Business / Finance / Company: A class of a Collateralized Mortgage Obligation (CMO) whose principal is paid off first when the underlying mortgages are prepaid due to falling interest rates. When interest rates rise, there will be MORE

Pass-Through Security

Business / Real Estate / Pass-Through Security: A security issued by the Government National Mortgage Association (Ginnie Mae) to mortgage investors. Cash flows from the underlying block individual mortgage loans are passed through to the holders o MORE

Overshooting

Business / Finance / Overshooting: The tendency of a pool of MBS to reflect an especially high rate of prepayments the first time it crosses the threshold for refinancing, especially if two or more years have passed since the date of i MORE

Negative Convexity

Business / Finance / Negative Convexity: A bond characteristic such that the price appreciation will be less than the price depreciation for a large change in yield of a given number of basis points. For example, a fixed-rate mortgage may lo MORE

Scheduled Cash Flows

Business / Finance / Scheduled Cash Flows: The mortgage principal and interest payments due to be paid under the terms of the mortgage, not including possible prepayments. MORE

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