Refinancing concerns hit government-backed mortgage bonds

08/16/2010 | Bloomberg

After hitting record-high prices, mortgage bonds backed by the government are underperforming Treasurys by the most in 2010 as investors worry the refinancing trend will surge. Index data from Barclays Capital show that securities from Fannie Mae, Freddie Mac and Ginnie Mae have had the worst results compared with government debt since December. Record-low interest rates are expected to lure more homeowners to refinance, and speculation is mounting that the government will ease rules to help more borrowers qualify for loans.

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