• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

EVP Systems

  • Home
  • Support
    • Contact
    • FAQs
    • Tutorials
  • Software
  • Services
  • Accounts
    • Sign-Up
    • Mailing Lists
    • Pricing
    • Payments
  • About Us
    • The Company
    • EVP Office
    • Professional Services
    • EVP Everywhere
    • EVP Upload
    • Legal and Compliance
    • Sales Material
    • Contact Us

How are Mortgaged-Backed Securities (GNMAs, FNMAs, FHLMCs, CMOs) priced?

Mortgage-backed securities can be very complicated. That’s because mortgage-backed pools have several components that must be included in Date-of-Death and Alternate Date valuations.

Variables in mortgage-backed securities include the market value of the remaining balance, interest accruing throughout the current interest period, any accrued principal from prior months and any accrued interest from prior interest periods. Also, careful consideration of principal payments between the Date-of-Death and the Alternate Date is required for Alternate Date valuations. EVP Systems takes into account all of these components.

Pay down factors are reported as a percentage of the original face value (e.g. a factor of 0.911448605). This factor is multiplied by the face value to obtain the remaining principal, which, in turn, is multiplied by the mean price to obtain the value of the security. The formula is:

Value = Face Value × Factor × (Mean Price ÷ 100)

Accrued interest is reported on a 30/360-day count basis. Interest for the current month is calculated from the record date (month-end) to the Date-of-Death. Interest from prior months is reported separately if the Date-of-Death is between the record date and the payment date. However, accrued principal is reported if the Date-of-Death is between the record date and the payment date. This anticipated principal payment is for the month(s) prior to the Date-of-Death.

In the case of Alternate Date valuations, the security value is based on the new unpaid balance or pay down factor. Principal paid between the Date-of-Death and the Alternate Date is reported as a separate value.

Posted on July 14, 2020 •

Primary Sidebar

Things You Should Know

  • Join EVP Systems at Heckerling’s Diamond Anniversary on January 8, 2026
  • Happy Holidays from EVP Systems! on December 17, 2025
  • Good to Know: Reports on April 9, 2025
  • EVP Systems at Heckerling 2025 on January 8, 2025
  • Happy Holidays from EVP Systems! on December 9, 2024
  • Fee Changes for 2025 on November 1, 2024
  • We’re Going to Disneyland—for NAEPC 2024! on October 18, 2024
  • CrowdStrike BSOD and EVP Systems
  • EVP Office 9.1.3 Now Available on July 18, 2024
  • EVP Office 9.1.0: Now Available, Featuring Name Preview on January 8, 2024

Don’t let death and taxes ruin your day!

Footer

About EVP Systems

Trusted by thousands of banks, brokerages, and law firms, Estate Valuations & Pricing Systems has been the leading provider of high-quality security evaluations for estate- and gift-tax purposes for over 40 years.

Get in Touch

1531 Chapala St., #1
Santa Barbara, CA 93101
(818) 313-6300 • FAX: (818) 313-6313
support@evpsys.com
sales@evpsys.com
Mailing Lists

Explore the Site

Communication CapWatch Installation Passthrough Compliance

All contents copyright © 1984–2026 Estate Valuations & Pricing Systems, Inc. • Do Not Sell My Personal Information • Service Status