parameters to adjust the model to better reflect actual results. After testing, adjusting the burnout tuning parameter to 1.1 provided the most accurate results across all time periods examined. Using the FNMA 30 model, analyzing data from August 2002 to January 2003, the two graphs below illustrate the results of our adjustments. Clearly, increasing the burnout to 1.1 improves model performance significantly. We recommend that our model users tune the burnout parameter of the GNMA, FNMA, and FHLMC 30yr models to 1.1 for the greatest accuracy.

Burnout set at 1.0

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