Prepay Commentary

June MBS Prepayment Speeds



Different month, similar results. Again, mortgage prepayments posted broad increases. Regarding speeds next month, right now I think it is reasonable to expect prepays to more or less maintain current levels. In the following month though, given the recent, and somewhat sudden decline in rates, it is possible we could see further increases.


Single Security Initiative

June 3rd has come and gone, marking the “Go Live” date for the Single Security Initiative. As you may recall, this is a joint venture between Fannie Mae and Freddie Mac to issue a single, Uniform, TBA-eligible Mortgage Backed Security. Freddie Mac’s offer to exchange certain eligible securities for Mirror (UMBS) certificates began last month. If you need a refresher, here is a link to a Strategic Insight authored in March.


Notables and Thoughts


Based on the Freddie Mac Primary Mortgage Market Survey, 30- and 15-year fixed-rate mortgage rates are at their lowest levels since September and November 2017, respectively. From their 2018 peaks, 30- and 15-year mortgage rates are down 112 and 108bps, respectively.




(CNBC) As mortgage rates plunge, millions more homeowners can benefit from refinancing

“Mortgage rates are falling unexpectedly and sharply, and that means millions more homeowners can now benefit from refinancing their loans.”









FNMA Speeds by Vintage Year

FGLMC Speeds by Vintage Year

GNMA Speeds by Vintage Year

Non-Generic Collateral Comparison Tables



Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

KSmith@viningsparks.com


Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

AHofer@viningsparks.com


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