August HFA voluntary prepayment ratios to generic counterparts declined sharply, reversing the increases of the past two months. The ratios on new production Tier 1 Ginnies are at zero on 4s and higher, and in the 20s percent on lower coupons. Tier 2 ratios are similarly split, with 4s and higher at zero and lower coupons averaging high 40s percent on 3.5s and nearly 20 percent on 2.5s and 3s, and Tier 3 ratios are near zero except for nearly 60 percent on 2.5s and a wide range of 14 percent to 115 percent on 4s. HFA S-curves continue to normalize and should settle down at flatter levels in the coming months.

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