Prepayment rates for conventional 30-year fixed-rate mortgages in agency mortgage-backed securities recorded "modest gains" in the February reporting period, according to Bear Stearns & Co.Overall speeds for 30-year collateral came in at a constant prepayment rate of 11.2 CPR for Fannie Maes, up 0.5 CPR from January's level, and 9.7 CPR for Freddie Macs, up 0.7 CPR, Bear Stearns analysts Dale Westhoff and V. S. Srinivasan reported. Prepayments on 30-year Freddie collateral rose a little more than for corresponding Fannie collateral, but continued to be "marginally slower" across most coupons and vintages, the analysts said. Meanwhile, overall speeds for 30-year Ginnie Mae collateral held fairly steady, with discount coupons rising by over 10% and premiums recording comparable declines. "The March prepayment report should reflect the onset of the spring/summer increase in housing turnover activity, which should be a barometer for the housing market and expectation for discount speeds through the summer months," the analysts said. They predicted an increase of over 25% in March prepayments. Bear Stearns can be found online at http://www.bearstearns.com.

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