MBS MID-DAY: 2/6/2012

The list of housing markets showing measurable improvement expanded by 29 metros in February to include a total of 98 entries on the National Association of Home Builders/First American Improving Markets Index (IMI), released today. Thirty-six states are now represented by at least one market on the list...

ommercial/multifamily originations during the fourth quarter of 2011 were up 13 percent over the fourth quarter of 2010, but fell 7 percent from the third quarter of 2011, according to the Mortgage Bankers Association's (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.

"MBA's Commercial/Multifamily Mortgage Bankers Origination Index hit record levels for life insurance companies in the second and third quarters of 2011," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "In the fourth quarter, multifamily originations for Fannie Mae and Freddie Mac hit a new all-time high. While the CMBS market continued to be held back by broader capital markets uncertainty during the past year, others - like the GSEs, life companies and many bank portfolios - increased their appetite for commercial and multifamily loans."

Volume and volatility have been in short supply so far this morning as markets continue to wait for clarity on whether or not Greece will accept the terms of its latest bailout. With no domestic economic data or other market moving events, MBS and Treasuries have been almost entirely flat this morning.

10yr yields are right at unchanged levels versus 5pm on Friday, but slightly improved versus 3pm marks. Fannie 3.5 MBS are up a tick at 103-24, but have been trading between 103-22 and 103-25 all morning. Fannie 3.0s, which are showing enough quote activity with reasonable bid/ask spreads for us to mention, are unchanged at 101-19.

(Reuters) - Greece let yet another deadline slip on Monday for responding to painful terms for a new EU/IMF bailout, as German Chancellor Angela Merkel made clear Europe's patience is wearing thin over drawn-out negotiations among its feuding political leaders.

Failure to strike a deal to secure the 130 billion euro ($170 billion) rescue risks pushing Athens into a chaotic debt default which could threaten its future in the euro zone.

Merkel turned up the heat, saying Athens had to come to terms with the "troika" of lenders - the European Commission, European Central Bank and IMF - to get the funds it needs to meet big debt repayments in March.

Greek political leaders, positioning themselves for a likely general election in April, have baulked at accepting another package of deeply unpopular wage and pension reductions, job cuts and tougher tax enforcement measures.

Speaking in Paris alongside French President Nicolas Sarkozy, Merkel said she wanted quick action from Athens.

"We want Greece to stay in the euro," she told a news conference. But she added: "I want to make clear once again that there can be no deal if the troika proposals are not implemented. They are on the table, time is of the essence. Something needs to happen quickly."