Last week, the MBA Refi Index came in at only 1200. Experts say this confirms that the market saw the peaks in prepayments last month, and if there will not be another rally in rates, prepayments are going to subside pretty substantially in the near term.

Aside from refis slowing down - the market is not seeing a new supply of passthroughs from refis - the peak of housing turnover or the surge of applications to buy homes, which typically happens in May and June, is over. Because of these two factors, observers have seen a considerable decline in the selling by mortgage originators into the forward market in the last couple of weeks.

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