With current mortgage rates in the 5.90% level, Street analysts predict the market is now close to another refinancing explosion.

Mortgage rates are so low in part, because the basis tightened quite dramatically in the beginning of the year. With mortgage rates inside of 6.0%, analysts from Bear Stearns said that well over 80% of the mortgage universe is still refinanceable. Further, over 70% of 2002 production would have another opportunity to refinance at these levels. This means that prepayments will be strong into the second quarter of 2003.

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