The Bond Market Trade Association's Mortgaged Asset-Backed Securities Division's
prepayment model based on an assumed rate of prepayment each month of the then unpaid
principal balance of a pool of
mortgages. PSA is used primarily to derive an implied prepayment speed of new production loans. 00% PSA assumes a prepayment rate of 2% per month in the first month following the date of
issue, increasing at 2% percentage points per month thereafter until the 30
th month. Thereafter, 100% PSA is the same as 6% CPR (Constant prepayment rate).