Content area
Full Text
Prepayment rates for agency mortgage-backed securities rose substantially in April for new 30-year coupons in the 5.5%-6.5% range, and Freddie Mac speeds were consistently faster than those of Fannie Mae among such coupons.
Among Fannie Maes, speeds for the 2002 vintage 5.5s, 6.0s and 6.5s increased by constant prepayment rates of 9-12 CPR, reaching 20, 50 and 63 CPR, respectively, according to the Bear Stearns Prepayment Commentary. For comparable Freddie Macs, speeds were 3-6 CPR faster.
"We trace this difference to two sources: 1) the heavy concentration of Wells Fargo loans (they tend to prepay faster because of large loan sizes); 2) the shorter refinancing aging ramp associated with ABN Amro pools," analysts Dale Westhoff and Bruce Kramer said.
Noting the return of mortgage rates to near their 40-year lows, the Bear Stearns analysts said they...