Techdamentals
Oct 8, 3:15 AM
$AGNC
Prepayment risk is this company's whole business and most people outside the sector have never heard the term.
When rates drop, borrowers refinance and hand the money back early, exactly when there is nothing good to reinvest it in. Investors charge for that in advance, which is part of why the spread stays wide while rates are high.
https://techdamentals.com/newsletter/why-a-fed-cut-wont-lower-your-mortgage?ref=st
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