> The bank doesn't care what interest rates are going to be next year, because they sell the mortgage now and collect the cash for it. The buyer cares, but the

> The bank doesn't care what interest rates are going to be next year, because they sell the mortgage now and collect the cash for it. The buyer cares, but the buyer is probably a hedge, pension, or sovereign wealth fund that in theory at least should be able to estimate & offset interest rate risk. One thing to note about securitization and prepenalties: The risk of prepayment being priced in, but there is the opposite balance of the fact Mortgage Originators (not the borrower) in some circumstances do have a prepayment penalty; this period is typically up to 6 months after closing. So, they care, but the risk is (like so many in finance) heavily abstracted.