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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (9405)	3/5/2004 9:42:27 AM
From: ldo79	Read Replies (3) \| Respond to of 110194

Could this lead to some unwinding?: =================================== Reuters US February mortgage prepayments jump on low rates Friday March 5, 9:35 am ET NEW YORK, March 5 (Reuters) - More U.S. homeowners prepaid mortgages in February after a fall in loan rates at the start of the year re-energized refinancing, analysts said on Friday. Prepayments last month rebounded more strongly than the market expected after hitting a two-year low in January. About $70 billion of fixed-rate loans that support mortgage securities guaranteed by Fannie Mae (NYSE:FNM - News) and Freddie Mac (NYSE:FRE - News) were paid off in February, up from January's $54 billion, according to Wall Street analysts. Homeowners benefit from lower rates but holders of bonds backed by mortgages, or mortgage-backed securities, suffer from faster prepayments since they lose out on interest income when mortgage investments are repaid sooner than expected. Analysts forecast that prepayments will continue to rise as much as 25 percent in March versus February's levels, since weekly refinancing demand hit a seven-month high last week.