As traditional prepayment models, which assume a generic borrower base, become unfashionable, Bear Stearns has launched a new model focusing specifically on loan or borrower attributes.

Standard models have generally looked at distinctions in loan type, loan seasoning, and the average response of the borrower to refinancing opportunities - features generalized across borrowers in the agency market. Bear's new model considers other factors, such as home price appreciation, loan size and rate premium for analyzing the agency sector.

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