25-5 Consider a GNMA mortgage pool with principal of $11 million. The maturity i

Question

25-5

Consider a GNMA mortgage pool with principal of $11 million. The maturity is 15 years with a monthly mortgage payment of 10 percent per year. Assume no prepayments.

What is the monthly mortgage payment (100 percent amortizing) on the pool of mortgages? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

If the GNMA insurance fee is 4 basis points and the servicing fee is 46 basis points, what is the yield on the GNMA pass-through? (Do not round intermediate calculations. Round your answer to 5 decimal places. (e.g., 32.16161))

What is the monthly payment on the GNMA in part (b)? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Calculate the first monthly servicing fee paid to the originating FIs. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

Calculate the first monthly insurance fee paid to GNMA. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

Consider a GNMA mortgage pool with principal of $11 million. The maturity is 15 years with a monthly mortgage payment of 10 percent per year. Assume no prepayments.

Explanation / Answer

a. What is the monthly mortgage payment (100 percent amortizing) on the pool of mortgages? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Principal $11,000,000.00 Rate =10%/12 0.83% Period = 15 x 12 180 Monthly mortgage payment = PMT(.83%,180,-11000000) $118,206.56 b. If the GNMA insurance fee is 4 basis points and the servicing fee is 46 basis points, what is the yield on the GNMA pass-through? (Do not round intermediate calculations. Round your answer to 5 decimal places. (e.g., 32.16161)) GNMA's annual interest rate = .10 - 0.0046 - 0.0004 9.50% Monthly interest rate = 9.50%/12 0.79% c. What is the monthly payment on the GNMA in part (b)? (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16)) Principal $11,000,000.00 Rate =9.50%/12 0.79% Period = 15 x 12 180 Monthly mortgage payment = PMT(.79%,180,-11000000) $114,864.72 d. Calculate the first monthly servicing fee paid to the originating FIs. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Monthly servicing fee = .46%/12 x $11,000,000 $4,216.67 e. Calculate the first monthly insurance fee paid to GNMA. (Do not round intermediate calculations. Round your answer to the nearest dollar amount.) Monthly insurance payment = .04%/12 x $11,000,000 $366.67

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