What are Mortgage Industry Medians (MIMs™)?
MIMs is a daily estimate of consensus Wall St. dealer prepayment forecasts. On the first and fifteenth of each month, the Bond Market Association www.bondmarkets.com surveys the eleven largest MBS dealers for their current long-term prepayment forecasts for the largest components of the mortgage market. These individual dealer long-term forecasts and the corresponding medians are the most accurate and consistent market consensus of long-term prepayment rates. As mortgage rates change, daily estimates of the consensus Wall St. dealer prepayment forecasts are created for use in their valuation and risk management models. This means that mortgage bankers can have reliable and consistent consensus prepayments on a daily basis for MSR pricing and risk management. MIMs will also provide accurate estimates of the how the medians are expected to change as interest rate change. This ability will play an increasingly important role in the day-to-day risk management activities of mortgage bankers
