The phrase "pre-payment risk" is an oxymoron; when someone pays off their loan early due to a pre-payment, there is no risk. You've (the bank / person who loaned out the money to the borrower) got ALL of your principle back PLUS all of your interest to date as well as ALL of your fees (fees which would have normally been budgeted to cover a much longer time-frame, in fact). Moreover, you or someone else is making NEW money on the new fees for the re-finance/pre-payment.Sure, you might be getting less overall interest, but it is a FACT that you are getting more in fees as well as 100% of your original principle back.
Ergo, no "risk".
It does give me a good chuckle though when I hear someone claim that getting your money back early is a "risk", though!