Experts called mortgage securities’ prepayment speeds relatively tame in the latest month but some did respond to lower rates.
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Credit Suisse researchers found conventional speeds increased by 8% from the previous month, attributing the increase to lower rates. Separately, Barclays Capital researchers said Fannie Mae mortgage securities with coupons in the 4% to 5% range saw a small pickup in prepayments due to lower rates that was slightly more than they projected.
Both Barclays and Credit Suisse noted little if any rate response in higher coupons and prepayment increases in some seasoned collateral from between 2003 and 2005.
