U.S. mortgage bond prepayments unchanged in April

NEW YORK, May 7 (Reuters) - Prepayments on U.S. mortgage-backed securities were unchanged in April as higher seasonal factors offset one fewer calendar day, Wall Street analysts said late Friday and early Monday.

Prepayment speeds were mostly in line with Wall Street expectations and the April figures reflected the first full month of activity since the late February start of the implosion of the subprime mortgage market.

Overall fixed-rate agency prepayment speeds were unchanged in April, with the paydowns flat at $40 billion, according to JPMorgan.

Net fixed-rate, mortgage-backed securities issuance was about $23 billion, the company said in a research report.

Prepayment speeds are key factors for investors to determine the value of mortgage bonds. If prepayments rise or fall too quickly, they hurt returns on mortgage securities.

The unchanged prepayment speeds in April followed a March rise. March's 15 percent increase was primarily due to a combination of a higher volume of home loan refinancings, rising seasonal factors and three additional calendar days.

Mortgage rates were steady in April. Lower mortgage rates entices home loan refinancing, a key factor in prepayment speeds.

JPMorgan expects prepayment speeds in May to increase by 12 percent. May seasonal turnover is typically 7 percent higher than April and there are two extra collection days during the month.