| But now, how much is going to be paid off to the second mortgager? |
| And the mortgager must stay in residence while the lodger's there. |
| Thus, a mortgage effectively is composed of a long-term non-callable bond plus an embedded call option that gives the mortgager the right to buy back the bond at par. |
| That is a risk of early redemption which usually occurs when the interest rates are falling down creating refinancing possibilities for the mortgager with lower interest rates. |
| In the case of MBS the bank acts as an intermediary between an investor and a mortgager. |
| He felt like a mortgager who sees himself foreclosed and sold up. |
