The current outlook for September prepayment speeds is for around a 10% increase overall with CPRs on 4s through moderately seasoned 5s increasing between 30% and 50%.

Meanwhile, credit-impaired coupons are expected to be mostly slower. The factors influencing speeds include a jump in refinancing activity as mortgage rates dropped. For August, 30-year fixed mortgage rates averaged 4.26% compared with 4.55% in July, while the Mortgage Bankers Association's (MBA) Refinance Index averaged 60% higher under the expanded survey coverage. A partially offsetting factor is a lower day count of 21 from 23 in August.

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