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Conditional Prepayment

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"The Conditional Prepayment Rate (CPR) is the annualized expected rate of prepayment of principal for a pool of mortgage loans and mortgage-backed securities. Lenders are likely to be happy with a high CPR when mortgages interest rates are rising; when rates are going down mortgage pools with high CPR are considered undesirable by investors.
The Conditional Prepayment Rate (CPR) is used as prepayment measure for other loans, as well, and not only for mortgage loans. However, mortgage loans have direct correlation with existing mortgage interest rates and while when rates for other loans drop, prepayment levels are unlikely to rise dangerously. With mortgage loans, and especially fixed rate home loans, a drop of the interest rates signifies increased risk to investors, as homeowners tend to refinance. "

"When rates are going down mortgage pools with high CPR are considered undesirable by investors."

Shouldn't this be the other way around. I'm a bit confused. Lower rates would mean that these pool receive lower payments. Shouldn't this be bad for investors and them be pro-pre-payments?
 
I don't have a finance background, but just reading this excerpt, it seems like investors will want low CPR when interest rates are low, so they don't have to reinvest the prepayment at the prevailing lower rates. When rates are high, they'd want greater prepayment to reinvest at the prevailing higher rates.
 
The actual reason why high CPR pools are not desired in the case mentioned above is the following: certain MBS investors will not get cash flows as they are holding certain tranches (interest-only, for example) that will get wiped out by the prepayment event. When rates are going down, certain mortgagors will prefer (especially early in the mortgage life) to refinance at a lower rate to save in a long term on interest payments. For investors getting the complete investment back (principle-only tranche of an RMBS, for instance) there is also a reinvestment question.
 
Ideally an investor wants a slow prepaying high yielding asset eg Pools with specified characteristics (specified pools). When the market's (TBA MBS) has sold off significantly investors holding the earlier coupon suffer from extension risk. The reason being borrowers of these low coupon pools will not refinance into current market rates. While this is good in some sense ie the investor will get a stable cashflow, it locks up his principle for reinvestment into current rates.
 
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