The August prepayment report showed speeds slowing for recent production 5.5s and 6s. Meanwhile, 6.5s and higher paid at essentially the same rates relative to August. There were only moderate dips in the recent production and scattered increases in more seasoned pools.

“Consistent with leading indicators going into the August reporting period, aggregate speeds posted substantial across-the-board declines at and below the 6.0% coupon level,” said a Bear Stearns report released this morning. “In contrast, 6.5% and higher coupons were flat to modestly faster in today’s report.”

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