Conventional prepayments slowed as expected in December as a result of slightly lower refinancing activity in November. This was partially offset by an increase in the number of collection days to 21 from 20.

Notable was the larger-than-expected slowing in 4.5% and lower coupons, while higher coupons prepaid faster than expected, especially 6.0% and higher. In general, CPRs on less seasoned 4.0% and 4.5% coupons were expected to show the largest percentage declines resulting from seasonal and static day counts associated with the time of year, while higher coupons were projected to be flat to slightly higher because of the longer lag times for processing loans.  BNP Paribas analysts suggested too there was a pickup in delinquency buyouts in higher coupons.

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