ayodayo

This has just started to confuse me too. I think passme was incorrect above, but I think he knows he was. My 2 questions:

1) If the range is 90-300 PSA, and every month it is consistently 90 PSA, will the support tranche have enough to cover the PAC tranche and ensure there is no extension risk? If so then I think I get it.

2) How is the support tranche paid off? Pg. 389 (volume 5) in the text has an example of PAC & Support tranche payoffs with 165 PSA for the life of the investment. For the life of me I cannot see how they get the principal amounts paid each month. Can anyone?

Thanks,
Pistol