Exam 3am #25. Are there any ABS that are path dependent? I know HEL have its own customized prepayment rates and stuff. does that mean it’s also similar to MBS where it is path dependent and thus we shold also be using Monte Carlo to vlaue it?
yup monte carlo with OAS for path dependent…
ARe there any other ABS other than HELS?? How about that manfufactured housing back security? Dude thinking of HELS is like hell for me haha…ok dumb joke.
There’s no advantage of paying back a manufactured housing loan back, it’s like a car in which it depreciates over time.
hels – sensitive to refinancing as similar to mbs in structure man. housing loan-- small loan balances, high depreciation, low borrower credit ratings—refinancing unlikely auto loans…small loan+high dep…refinancing unlikely student loans…prepayments may occur due to default …cud be valued with monte small business loans— level amortizing loans payments…consist of interest set at the begin of reset period + schd principal…prepayments can occur… so use monte can someone confirm???