January prepayment reports highlighted record speeds with some cohorts prepaying at 70 plus CPR. Coming off a year that saw the biggest refinancing wave ever, it's worth taking a look into the increasing efficiency with which people are exercising the refi option, which some people say may be responsible for the remarkable numbers.

According to a recent report by UBS Warburg, "an interesting surprise" happened early last year when the time lag between loan application and closing was shortened to less than a month, causing fast prepays to arrive a month earlier than anticipated. The report said that this is a reflection of improved refinancing/origination efficiency apparent in new production, but not in seasoned vintages.

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