Although outright gains in Fannie 3.5's haven't exceeded 4 ticks since the open, there is something to be said for stability, especially when MBS are stably holding onto 5-8 ticks of gains versus the previous session. We sometimes refer to the potential reprices during such times as "stability reprices" and we just got one.

We'd continue to hold the possibility open for a minority of the "early crowd" lenders to get on board with something like this, but wouldn't expect to see anything widespread unless Fannie 3.5's were moving higher into the 103-20's. They're currently up 7 ticks on the day at 103-20 and 10yr yields are down 6 bps at 1.9152. S&P's seem to have stalled out for now near their highs of the day just under 1370.

Some long term charts are updated in the MBS Commentary Section. Take a look:

Aggregate consumer debt fell $126 billion to $11.53 trillion in the fourth quarter of 2011 according to the Federal Reserve Bank of New York’s latest Quarterly Report on Household Debt and Credit, a 1.1 percent decrease from the $11.66 trillion reported in the prior quarter’s findings. The report, which includes data on a variety of household debt levels, also revealed further declines in real estate debt and delinquencies, while showing that other forms of consumer indebtedness increased.

Mortgage and home equity lines of credit (HELOC) balances fell a combined $146 billion, a sign that consumers continue to reduce housing related debt.

After a mild uptick in the third quarter, total household delinquency rates resumed their downward trend in the fourth quarter. The report finds that $1.12 trillion of consumer debt (or 9.8 percent of outstanding debt) is currently delinquent, with $824 billion seriously delinquent (at least 90 days late). Meanwhile about 2.2 percent of mortgage balances transitioned into delinquency during the fourth quarter, resuming the recent trend of reductions in this measure. However, delinquency rates remain elevated compared to historical figures.

"While we continue to see improvements in the delinquent balances and delinquency transition rates this quarter, there has been a noticeable decrease in the rate of improvement compared to 2009-2010," said Andrew Haughwout, vice president and economist at the New York Fed. "Overall it appears that delinquency rates are stabilizing at levels that remain significantly higher than pre-crisis levels."