Prepayment rates for Fannie Mae mortgage-backed securities jumped during the April reporting period, especially among 2003 vintage 5.0% and 5.5% coupons, according to the Bear Stearns Prepayment Commentary.The constant prepayment rates of those coupons increased by over 50%, from 10.6 CPR and 24.4 CPR, respectively, in March to 16.0 CPR and 35.4 CPR in April, Bear Stearns analysts Dale Westhoff and Bruce Kramer reported. Speed-ups among higher coupons were "much more muted," they said, with 6.0s and 6.5s increasing by 15% and 5%, respectively. Speeds of 2003 and 2004 vintage Freddie Mac MBS were similar to or slightly below those of comparable Fannie Maes, which the Bear Stearns analysts said may stem from Freddie Mac's efforts to return its MBS speeds to market averages. "With minimal spillover effects expected from an origination pipeline with excess capacity, speeds across the entire coupon stack should reverse course in May as the effects of the 80-plus basis point selloff in mortgage rates since March begins to hit the numbers in May, June, and July," Mr. Westhoff and Mr. Kramer said. Bear Stearns can be found online at http://www.bearstearns.com.

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