With the Mortgage Bankers Association (MBA) Refinancing Index expected to have an above 9000 showing this week, as well as further gains predicted in the near term, analysts are now expecting prepayment speeds to remain fast for the next four months. Speeds should peak in July.

Art Frank, head of mortgage research at Nomura Securities International, said that the current coupon Fannie yield at the beginning of the week of May 12 was still above 4.70. However, by last Tuesday it had gone down quite a bit to 4.44. Because of this, there is a distinct possibility that the Refinancing Index this week would exceed the 9387 record reached in March 2003.

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