Prepayment speeds increased over 50% on average in October. The increase was due in part to a longer business day count, 23 days vs. 17 days, as well as sharply lower rates. Lehman Brothers estimates an average of 6.75% vs. 6.97% in September. Bear Stearns adds that next month's report will reflect a 6.61% mortgage rate and given that the current mortgage rate is about 6.40%, they expect refinancings to intensify.

GNMA/FNMA

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