Neutral on 30-year conventionals. Mortgages look good on OAS regression although rolls on 6s and above have come under pressure since the recent prepay report. Analysts are concerned that the best of mortgages is behind us, given the recent declines in swap spreads and volatility and the potential for extremely high prepays. Prefers select cohorts that are likely to have large concentrations of credit-impaired collateral. In 15-year conventionals, 15s have recently cheapened to 30s, and now look attractive to 30, at least in lower coupons.

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