Experts say that Fannie Mae's new guidelines - announced last week - on cash-out refinancings will have minimal impact on prepayments going forward.

The changes are based on internal research Fannie conducted, confirming that cash-out refinancings have higher default rates than other types of refinancings. The study found that defaults in cash-out refinancings in which the loan balance increases by more than 20% are three times more likely than refinancings where the balance increases by less than 3%. The GSE also found that high appraisals are more common in cash-outs.

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