Prepayments Slow after February Surge

Peters, Terry
June 2008
Mortgage Servicing News;Jun2008, Vol. 12 Issue 5, p6
The article reports on the slower performance of the overall prepayment rates for mortgage-backed securities in the U.S. after a 52% surge in February as originators tried to avoid the new delivery fees applicable starting in March. It notes that extension risk is currently the prevalent risk especially in the 30-year 5.0% and 5.5% coupons. Mortgage rates for adjustable rate mortgages have declined as index rates fell along with short-term rates determined by the Federal Reserve Board.


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