Prepayment researchers at Banc One Capital Markets recently released a study on behavior characteristics of $500,000-plus balance, non-prime hybrid adjustable-rate mortgages, finding that, "counterintuitive to traditional wisdom," these high balance cohorts have a similar prepayment profile to the smaller, $200,000 to $300,000 conforming balance ARM pools.

Generally, in prime mortgages, larger loan balances tend to be more prepayment sensitive, because the borrower savings are greater. On the non-prime side, loans follow this pattern until they reach the $500,000 area threshold, at which point the trend reverses, Banc One found.

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