MBS RECAP: 11/28/2011

The uptrend that began this morning has continued steadily into the afternoon. Benchmark 10yr yields broke through resistance at 2.03+ and Fannie 3.5 MBS broke back above the important 101-16 and currently sit 2 ticks better on the day at 101-21. A few of the early lenders have already repriced for the better. A few more might reprice at these levels with a majority getting on board around 101-26 levels.

Mortgage balances on consumer credit reports fell by approximately $114 billion or 1.3 percent over the third quarter while home equity lines of credit balances increased by roughly $14 billion or 2.3 percent.

Non-real estate indebtedness now stands at $2.62 trillion, about 1.3 percent above its Q2 level.

Aggregate credit card limits declined by about $25 billion slightly offsetting increases from earlier this year.


Open credit card accounts declined by 6 million to 383 million in the third quarter and credit card borrowing limits fell again, partially offsetting some gains seen earlier in the year.

Open credit card accounts for third quarter were approximately 23 percent below the peak in second quarter 2008 and balances on those cards were nearly 20 percent below their highest levels in fourth quarter 2008.

Credit account inquiries within six months, an indicator of consumer credit demand, increased for the second quarter in a row.


Overall delinquency rates increased to 10 percent as of the end of September, compared with 9.8 percent at the end of June.

Approximately $1.2 trillion of consumer debt is delinquent with $834 billion being seriously delinquent (more than 90 days).

About 2.5 percent of current mortgage balances transitioned into delinquency in the third quarter, reversing a recent trend of reductions in this measure.


New foreclosures decreased 7 percent quarter over quarter and bankruptcies declined 18.8 percent year over year.