Cheap vs expensive MBS's using OAS as a measure option, bigger, question

ruchita

I know that OAS + Call option = Zpread
and i know that as the call option incr, the OAS will decr.
My question refers to why is that when OAS is less than its true value and the cost of the option is bigger than what it should be is the MBS considered CHEAP????

i dont get it!!

Thx!