Credit Suisse expects to see GNMA prepayment speeds rise 10% to 15% during the November period, according to a recent report.
The report said it bases this forecast on a rise in FHA loan application volume in September as borrowers tried to get loans before a mortgage insurance premium increase.
Analysts at the firm added that they expect an increased closing lag to occur due to the jump in apps, pushing speeds higher into the December period. This could be followed by a decline in January when they expect the backlog to clear.
Meanwhile, Sally Ann Runyan from Thomson Reuters reported that the outlook is for 30-year FNMA and GNMA speeds to increase 2% to 3% in November with the largest percentage increases in 4.5s at 7% and 5s at 3%, while super premiums are expected to stay flat or to slowdown.
Paydowns are currently estimated at $132 billion, while net issuance is expected to hold more or less flat.