For some time, Street analysts have claimed that the combination of a less robust housing market and higher interest rates would result in slower prepayment speeds. And with the latest releases from the Office of Federal Housing Enterprise Oversight (OFHEO) and National Association of Home Builders (NAHB), they were provided with the data to support their claims.

"The latest releases of the OFHEO home price index and the NAHB data point to a significant slowdown," Barclays Capital said in a recent report. "While speeds have not yet reacted to a slowdown in housing, we expect that as summer seasonals decline, prepayments will decelerate - and the latest data suggest sooner rather than later."

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