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PSA Model

Trading Term

A model created by the Public Securities Association used to estimate the prepayment rate for mortgage-backed securities as measured against a benchmark. If a Collateralized Mortgage Obligation is assigned a PSA number that is:

  • Equal to 100 – the assumption is that prepayment speed will remain stable.
  • Greater than 100 – the assumption is that the prepayment speed will be faster than normal.
  • Less than 100 – the assumption is that the prepayment speed will be slower than normal.

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