Refinancing Seen Peaking Without More Capacity: Mortgages
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Mortgage-bond investors are betting the U.S. refinancing boom has little growth left, even with rates at record lows and President Barack Obama’s administration taking steps to widen access.
Government-backed mortgage securities reached a record 108.6 cents on the dollar yesterday. Anyone bidding more than face value risks taking a loss if too many of the underlying mortgages get paid off early, so the willingness of buyers to pay those prices shows they expect restrained refinancings.