Mortgage Bond Prices Show Refinancing Limits: Credit Markets
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The mortgage-bond market is signaling changes to refinancing rules will aid fewer homeowners who owe more than their properties’ value than was initially anticipated.
Fannie Mae’s 30-year, 5.5 percent securities have risen to the highest since Oct. 3, erasing a decline later in the month sparked by a plan to expand the Home Affordable Refinance Program. Bondholders can be hurt by refinancing because prepayments curb the interest they receive.