Similar to the Regular MMA, but the borrower specifies the prepayment percentage to be paid annually prior to borrowing.
- Allows the borrower to match fund fixed-rate mortgages and reduce associated interest rate and prepayment risk — borrower determines the level of risk protection through selected CPR speed.
- Borrower must make annual prepayment of principal, equal to the previously specified percentage.
- Used as a financing source for fixed rate mortgage loans and mortgage-backed securities.
Maturity
10, 15 or 20 years; prepayment speeds can be 0%, 5%, 10%, 15% or 20%
Rate
Fixed rate for entire term of maturity
Accrual Basis
30 / 360 day basis
Interest and Principal are Paid
Monthly (payment is first credited to interest due, then to principal reduction)
Principal Prepayment Policy
Annually, the borrower must make a prepayment of principal equal to the CPR percentage established by the borrower times the outstanding principal balance on the payment date; any additional prepayment may be subject to prepayment fee; monthly payment is reset after any prepayment of principal.
Submission of Application
A Select Payment MMA application is required for each borrowing.
To learn more about our Advance products, contact Credit Operations at 800-828-4191.