Quicken Mortgage-Backed Bond Security Valuation doesn't Match Schwab Valuation
I received the following response from Schwab regarding why values are different. When will Quicken update value?
"I talked with Schwab, Fjolla and our Dave who is on our Fixed Income Trading Desk regarding the fixed income of FHLMC 5.5% SB8235 06/01/2038 and why QUICKEN shows the market value of $45,517.85, but Schwab shows $39,828.16.
The market value is based on the current pool factor of 0.87500097 which will go down every month as mortgages in the pool are being paid off. A new factor will be out on Monday.
This Example: Purchase price of $45,517.85 multiply by the Pool factor of 0.87500097 = $39,828.16
They unfortunately did not have information on if/when quicken would update.
Best Answer
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The issue of the "factor" used for mortgage backed (and other) bonds has been raised many times before. There is no data bucket for the "factor" in the program so unless Quicken creates one this will continue to be a problem in all sorts of situations where factors are part of the pricing dynamic.
I know that at least one Financial Institution (FI) reportedly sends correct price quotes for these sort of securities - I want to say "Fidelity" but that's just a guess - so you have to wonder why so many FIs don't.
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Answers
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The issue of the "factor" used for mortgage backed (and other) bonds has been raised many times before. There is no data bucket for the "factor" in the program so unless Quicken creates one this will continue to be a problem in all sorts of situations where factors are part of the pricing dynamic.
I know that at least one Financial Institution (FI) reportedly sends correct price quotes for these sort of securities - I want to say "Fidelity" but that's just a guess - so you have to wonder why so many FIs don't.
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Hi Tom,
Thanks for the response.
MJB
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