The Public Securities Association originally developed PSA and hence the acronym is sometimes referred to as its namesake. (The Public Securities Association became the Bond Market Association and is now known as the Securities Industry Financial Market Association or SIFMA). PSA is a prepayment benchmark based on CPR (Conditional Prepayment Rate). It is used as a measure of relative prepayment speeds. 100% PSA equals a starting rate of .2% each month for 30 months, at which point prepayments level off and stay constant at 6% CPR for the remainder of the life of the mortgage. Similar to CPR, PSA is used in multiples of 100 so that 200% PSA equates to .4% prepayment in the first month, leveling off to 12% in month 30.
