Even with quantitative easing in place, the extent to which borrowers respond to a given rate incentive may have peaked in the most recent prepayment report, according to researchers.

"For a given rate incentive, borrowers have maxed out on their response," Mahesh Swaminathan, director, head of residential mortgage-backed securities strategy at Credit Suisse told ASR's sister publication National Mortgage News. "If we rally, there will be a little bit more, but it will be incremental and small as opposed to some large moves."

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