MBS prepayment numbers for August are expected to jump, in part because of an increased number of days on which mortgage holders can finalize a refinancing. The market is projected to see the opposite effect in September, which will have fewer such days.

The number of "collection days" increased to 23 in August, from 21 in July, while September will see only 19. Meanwhile, historically low mortgage rates set in July continued in August, with the 30-year, fixed rate averaging 3.55%, down from 3.68% in June, and the Refinance Index rose an average of 1.8% in July after a nearly 19% surge in June, all of which contributes to an expected uptick in August MBS prepayments.

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