Prepayment speeds on 30-year conventional MBS are up 14% from the previous month, but face—at least—temporary constraints due to Hurricane Sandy, according to Credit Suisse research.
Some closings were delayed by the hurricane due to the need for re-inspections, said Daniel Jacobs, president of retail branching at Residential Finance Corp. He said his company is being as lenient with rate locks as possible. The latest Mortgage Bankers Association application numbers show a decline due to the storm.
Surprises in the latest prepayment numbers include a notable surge in loans eligible for the Home Affordable Refinance Program that Credit Suisse researchers attributed to operational changes made by the GSEs in September.
There also was a somewhat weaker than expected response in 2011 vintages with 3.5% coupons that might be attributed to the sharp September decline in mortgage rates this fall that pushed some closings out to November from October.