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Psa prepayment

• A prepayment model based on an assumed rate of prepayment each month of the then unpaid principal balance of a pool of mortgages. PSA is used primarily to derive an implied prepayment speed of new production loans, a 100% PSA assumes a prepayment rate of 2% per month in the first month following the date of issue, increasing at 2% per month thereafter until the 30th month. Thereafter, 100% PSA is the same as 6% CPR.

• Is the model or the speed for a mortgage backed security. A 100 percent PSA speed assumes a prepayment rate of .2 percent starting with the first after origination and continuing until the thirtieth month. Thereafter the model assumes a prepayment rate of 6 percent.

 
 Embedded terms in definition
 Issue
Mortgage
Origination
Pool
Prepayment speed
Prepayment
Principal
Production
Psa
Security
Speed
 
 Related Terms
 Fha prepayment experience
Prepayment
Prepayment option
Prepayment penalty
Prepayment risk
Prepayment speed
Prepayment window
Psa
Zero prepayment assumption

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