A mortgage with a prepayment penalty might be as much as 65 basis points cheaper for borrowers, according to GSE shareholder Bill Ackman.

Freddie sets an end date for investors to exchange legacy securities for those created as part of the single security initiative.

The prepayment rate on agency MBS hit a high for the year in September and that’s expected to be topped again in October. Analysts note that their prepayment models are off due to changes in lenders’ practices.