The likelihood of rising interest rates next year will not significantly hurt the positive performance of prime jumbo U.S. residential mortgage-backed securities, according to Fitch Ratings.The housing market is expected to remain strong, and most regions are expected to experience stable conditions, the rating agency said in its report titled "Global Structured Finance: 2004 Outlook and 2003 Review." Refinancing activity will continue to subside, and prepayment rates for most RMBS pools will slow, Fitch said. "The strengthening economy should lead to rising incomes that will help mitigate the effect of interest rate increases," said Tom Albertson, a Fitch senior director. "Fitch, as a result, expects that 2004 housing prices will be stable, which is good news for all RMBS sectors." Fitch can be found online at http://www.fitchratings.com.

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