MBS Speeds Surge

Prepayment rates for virtually all agency mortgage-backed securities shot up in the October reporting period, "substantiat[ing] the magnitude and breadth of the current refinancing wave," according to the Bear Stearns Prepayment Commentary.Speeds of Fannie Mae and Freddie Mac 6.0%-7.0% coupons rose by constant prepayment rates of 9-15 CPR, said analysts Dale Westhoff and Bruce Kramer. "Overall, there was little evidence of burnout in the numbers in coupons below 8%, with seasoned 7.0s (pools seasoned at least 30 months) paying an average of 63 CPR and seasoned 7.5s paying 59 CPR," the analysts said. Among Ginnie Mae securities the speed-up was similar, as CPR gains at and above the 6.5% coupon level were "nearly identical" to those for conventional MBS, they said. Bear Stearns can be found online at http://www.bearstearns.com.