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August 30 2017 by David Stinner in Edge Platform

Prepayment Speeds Analysis of Freddie Mac Specified Pools

Are there differences in the prepayment speeds of various Freddie Mac specified pools?

Specified pools are comprised of loans with more homogenous characteristics than the typical TBA pool. For example, loans with original balances of less than $85,000 (a low loan balance, or LLB, specified pool). For this analysis, we will look at the prepayment rates of low loan balance (LLB), medium loan balance (MLB, $85,000 < original loan balance <= $110,000), high loan balance (HLB, $110,000 < original loan balance < = $150,000), investor (original loan balance < $150,000 and 100% investment properties), and low FICO pools (original loan balance < $150,000 and FICO < 700). And to ensure an apples-to-apples comparison, we will restrict the analysis to 4%, 2014 vintage pools.

Background information on specified pools can be found at https://www.fanniemae.com/content/news/specified-pool-pay-up-commentary.pdf.

Watch the short video to find out the answer and to see just how easy this can be done with RS Edge.