Many investors have been moving up in coupon for quite some time given the attractive carry and muted prepayment speeds resulting from credit impairment.

At this time, FTN Financial analysts believe investors should not fight the Federal Reserve and so should start to reduce their premium exposure over the near to intermediate term given the government's aggressive program to lower mortgage rates and help borrowers refinance.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.