With interest rates low and federal housing initiatives in full force, the July prepayment report, scheduled for release in August, is expected to show an increase in speeds.

Mortgage rates are a factor in the expected gains in the lower coupons, while government policy actions through programs, including the Home Affordable Refinance Program (HARP), are affecting fuller coupon conventionals. Also affecting higher-coupon GNMAs is the June 11 reduction in Federal Housing Administration mortgage insurance premiums on streamlined refinances for loans made before June 2009.

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