Prepayment risk Study guides, Class notes & Summaries

What must a borrower do to avoid having late payments reported to a credit bureau? - Pay within 30 days of due date Max penalty if a borrower is required to use a specific title company or settlement agent? - 3 times the fee What should not be over-weighted in an analysis of borrower repayment capacity? - Credit scores Max prepayment penalty on residential mortgages in the first year of the loan - 3% What must condominium associations do with respect to property insurance? - Keep a "blank...

Primary economic role of structuring - Answer Structured securities complete the market - structured to meet all different needs & helps investors prepare for all states of the world MBS - Answer Mortgage-backed securities - security secured by pool of mortgages (mortgages are the collateral) RMBS - Agency RMBS - Answer Residential MBS - low credit risk: backed by the US government - has prepayment risk: borrower' s right to repay mortgage early a key risk Contraction risk - Ans...

NMLS SAFE EXAM 2022 QUESTIONS WITH VERIFIED ANSWERS What does TILA stand for? - ANS Truth-In-Lending Act, Regulation Z What is a HELOC loan? - ANS a secured loan in that you are borrowing against the equity that has been built in your house What is a REFI loan? - ANS LTV stands for - ANS Loan to Value Define PMI and state what the acronym stands for. - ANS Private mortgage insurance- on conventional loans Define one time variable funding fee and people in what situatio...

What does TILA stand for? - correct answer Truth-In-Lending Act, Regulation Z What is a HELOC loan? - correct answer a secured loan in that you are borrowing against the equity that has been built in your house What is a REFI loan? - correct answer LTV stands for - correct answer Loan to Value Define PMI and state what the acronym stands for. - correct answer Private mortgage insurance- on conventional loans Define one time variable funding fee and people in what situations is it...

Which type of bond has a coupon rate that is equal to the market yield? A) Par bond B) Fixed-rate premium bond C) Zero coupon bond D) All bonds E) Fixed-rate discount bond Correct Answer A) Par bond Which of the following bonds does not have reinvestment risk? A) Fixed-rate discount bond B) Zero coupon bond C) Fixed-rate bond with call option D) Fixed-rate premium bond E) Fixed-rate par bond Correct Answer B) Zero coupon bond The risk that the issuer of a bond will not be able to...

CMBS FINAL COPY STUDY GUIDE questions and answers 100% verified. Assuming a perfectly efficient debt market, what would be the forward rate during year 6, given the following current spot rates? Year: 1 2 3 4 5 6 Spot rate: .08 .085 .09 .095 .10 .105 - correct answers.((1+r6)^6/(1+r5)^5) - 1 2. Explain why, in the absence of transactions costs that spot interest rates should be a geometric average of the imbedded forward interest rates. Explain why, in an efficient...

What does TILA stand for? Truth-In-Lending Act, Regulation Z What is a HELOC loan? a secured loan in that you are borrowing against the equity that has been built in your house What is a REFI loan? LTV stands for Loan to Value Define PMI and state what the acronym stands for. Private mortgage insurance- on conventional loans Define one time variable funding fee and people in what situations is it waived for? Disabled veterans and surviving spouses. USDA loans are also called what? 50...

LBO Modelling Exam Questions With 100% Correct Answers What is the biggest difference between an LBO and an M&A? - answerUnlike an M&A, we're not assuming the PE firm will keep the company long term What makes a good LBO candidate? - answer-opportunity to cut costs -stable cash flows -good base of assets -undervalued/low-risk Walk me through a basic LBO model. - answer1. Make assumptions about the Purchase Price and how much debt to use 2. Create a Financial Sources & Uses section 3....

XCEL Exam Solutions A partial surrender is allowed in which of the following life policies? - Universal life All of the following riders can increase the death benefit amount EXCEPT - Waiver of Premium A health insurance policy where the insurer has the right to terminate the policy fr reasons other than the insureds health is called - Conditionally Renewable A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for heal...

Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance? - ANSWER-hospital indemnity What is the renewal date of a resident insurance agent's license? - ANSWER-On or before the last day of the licensee's birth month. A waiver of premium rider allows an insured to waive premium payments if the insured is? - ANSWER-completely and permanently disabled Long term care insurance applications must contain p...