Fannie/Freddie MBS Speeds Slow

Prepayment rates for agency mortgage-backed securities slowed down in January for most conventional 30-year coupons and vintages, according to the Bear Stearns Prepayment Commentary.The slowdown in constant prepayment rates averaged 2-3 CPR for most coupons, while the 2002 vintages slowed even less or, in the case of the 5.5% and 6.0% coupons, speeded up slightly, said analysts Dale Westhoff and Bruce Kramer. "The numbers show little evidence of burnout in the fully refinanceable conventional coupons, even among the most seasoned vintages," the analysts said. "For example, January marked the fourth consecutive month that 1998 6.5s have paid above 60 CPR and 2000 7.0s above 70 CPR." As for Ginnie Mae MBS speeds, they held steady or rose somewhat in the January reporting period. Messrs. Westhoff and Kramer said this may represent "the leading edge of a borrower response" to the falloff in mortgage rates in late December, or a reflection of servicer buyouts. Bear Stearns can be found online at http://www.bearstearns.com.