The latest round of monthly 30-year conventional mortgage-backed securities prepayment speeds came in slower than some expected.
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A Credit Suisse report issued midweek cited low 4% and 4.5% coupons as the main cause, suggesting that the Home Affordable Refinance Program and burnout have delayed lenders’ ability to reach these borrowers immediately.
The report suggests the more recent rates drops—and a possible peaking of the HARP program—might boost speeds going forward.
A Barclays prepayment report predicts a future pickup in speeds even though 3.5%-4.5% coupons were “roughly flat” in the latest monthly report.
