Mortgage termination is important when considering risk management at financial institutions and can generally be of two types: default and prepayment. Data consisting of 1,060 fixed rate mortgages collateralized by farm real estate to dairy producers made by AgChoice ACA from January 1, 2001...

A model to value Federal Agricultural Mortgage Corporation (Farmer Mac) agricultural mortgage-backed securities (AMBS) is developed and numerically solved. The results suggest prepayment penalties currently being used by Farmer Mac reduce yields on AMBS considerably. Even with prepayment...