FIN Problem - The Home Loan Corp, Inc (HLC)
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The Home Loan Corp, Inc (HLC) originates a pool containing 100 five year mortgages, with an average balance of $150,000 each. All mortgages in the pool carry a fixed interest rate of 6% (assume all payments are made annually). HLC now wishes to sell the pool of mortgages to the FHLMC. Assuming prepayments are constant at 10% (of the mortgage pool balance at the end of the previous year), what is the price of the pool of mortgages if the FHLMC wishes to obtain a rate of return equal to 7%?
12 years ago
FIN Problem - The Home Loan Corp, Inc (HLC) Solution
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- fin_problem__-_the_home_loan_corp_inc_hlc_solution.xlsx