With the Mortgage Bankers Association (MBA) Refinancing Index lingering in the 5000 vicinity, expect prepayment speeds to rise significantly going forward, analysts said.

Countrywide Securities said that this level of refinancing activity suggests unexpectedly fast speeds on 30-year 5.5s, which can be partially attributed to borrower movement into hybrid ARMs (see related story, p. 16). In an earlier publication, Countrywide stated that the Refi Index has in the past served as a reliable indicator of overall prepayment volume.

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