Government-backed mortgage bonds are underperforming Treasuries by the widest margin so far this year — after reaching record high prices — amid concern that refinancings will accelerate.

Fannie Mae, Freddie Mac and Ginnie Mae securities have returned 24 basis points, or 0.24 percentage point, less than U.S. debt this month, the worst relative results since December, according to Barclays Capital indexes. Fannie Mae's 6.5% bonds fell to 109.16 cents on the dollar from the high of 109.94 July 27, according to data compiled by Bloomberg.

Record-low interest rates for new mortgages may entice borrowers to refinance, led by those with newer loans, as applications hover at the highest level in more than a year, according to the Mortgage Bankers Association. The inability of some homeowners to qualify for new Fannie Mae and Freddie Mac loans is raising speculation that the federal government will loosen rules, punishing bondholders as higher-yielding mortgages disappear.

"Why are you going to believe the government is going to continue to pursue a policy that favors investors over homeowners?" said Doug Dachille, the chief executive officer of First Principles Capital Management LLC in New York, who oversees about $8 billion of fixed-income investments. He said he supports letting borrowers who have not missed payments on Fannie Mae and Freddie Mac loans get lower-cost mortgages without consideration of their incomes or home values.

Agency mortgage bonds returned 44 basis points more than Treasuries last month and underperformed by 29 basis points in December, Barclays Capital data shows.

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