Thirty-Year Conventional and Fannie HARP Prepay Speeds Rise


Thirty-year conventional mortgage-backed securities prepayment speeds came in 3% faster in the latest month, including a surprising 6% increase in certain Fannie Mae Home Affordable Refinance Program coupons and vintages, according to Credit Suisse.

The HARP increase was seen in 2006-2008 vintage Fannie 5s through 6.5s. In contrast, Credit Suisse found Freddie Mac HARP cohorts slowed by 3%, possibly due to a significant servicing transfer.

Trends in the 15-year sector were somewhat similar, but the speed pickup in particular low (2.5%) coupons was significantly more pronounced than in 3% 30-year coupons.

In contrast, the increase in 15-year 3% coupons compared to 30-year 3.5% coupons was underwhelming.

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