Prepayment speeds for March came in faster than consensus estimates, with some people attributing the accelerations to higher day count for the month, while others point to the significant increase in January and February application activity.

"In general, we anticipated faster speeds, but we were surprised by the magnitude of the accelerations," noted UBS analysts, adding that many borrowers who were previously "fence sitters' waiting for another mortgage rate dip might have considered February's low mortgage rates as the last chance to refinance. Also, anecdotal evidence shows that servicers and brokers might be eliminating the last refis from their books.

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