Benchmark Treasuries are on a nice little run lower in yield as 10's test their lowest resistance levels in the high 1.93's. Fannie 3.5 MBS are up 5 ticks on the day now at 102-02, and the longer they stay above the 102 level, the greater the likelihood that we see rate sheet improvements from a few more lenders beyond the few already seen.

The Federal Housing Finance Agency (FHFA) today announced that under terms set forth in the Housing and Economic Recovery Act of 2008 (HERA), the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2012 will remain at existing levels except in Fairfield County, Connecticut, where it will increase. A listing of the 2012 maximum conforming loan limits for all counties and countyequivalent areas in the country can be found here.

"...The Manager reported on System open market operations, including the ongoing reinvestment into agency-guaranteed mortgage-backed securities (MBS) of principal payments received on SOMA holdings of agency debt and agency-guaranteed MBS as well as the operations related to the maturity extension program authorized at the September 20-21 FOMC meeting...."

According to the report covering the first three quarters of the year, 16,776 companies, 18,366 branch offices, and 113,352 individuals now hold one or more licenses through NMLS. This is a total of 148,594 unique entities holding an aggregate of 277,326 licenses. During the third quarter the system added 8,173 new entities and 18,707 licenses. There are an average of 5.5 licensed mortgage loan officers in each company and an average of 1.1 branches.

Fannie 3.5's were already demonstrating a good ability to hold their ground at 101-26 support, a level they've maintained with one brief exception since yesterday at noon. The 5 year Treasury auction just now makes that support even more likely to persist.

The high yield came in 1.6 bps lower than expected as determined by 1:01:30pm when-issued yields ("when-issued" or "WI" = the best proxy for an "estimate" of where the auction will stop). That's positive in and of itself, but the bid-to-cover ratio was about as high as it gets on 5yr auctions, measuring 3.15 versus a recent average of 2.82.

During almost any other time in economic history, an auction like this would give a much bigger boost to Treasury prices across the curve as well as production MBS, but given the current macroeconomic fears surround the EU debt situation, it's a well-known fact that US Debt is in high demand--Supercommittee failures be damned. So in a way, the strong result is expected, and thus keeps a lid on most of the positivity that we'd otherwise be experiencing.

That said, MBS are about 4 ticks higher since before the auction, and 10yr yields have edge back down just inside their previous range. This COULD be good enough movement that a lender or two would reprice for the better, but we'd imagine they'd probably like to see these gains hold for a little longer than 10 minutes before doing so.

(Reuters) - The International Monetary Fund on Tuesday beefed up its lending instruments and introduced a new six-month liquidity line, throwing help to countries at risk from the euro zone crisis.

The IMF's said its more flexible Precautionary and Liquidity Line (PLL) would act as "insurance against future shocks and as a short-term liquidity window to address the needs of crisis bystanders."

The new PLL would give countries with relatively good economic policies access to credit for six months, the IMF said. It could also be used under a 12- to 24-month arrangement with access up to 1,000 percent of a members' quota.

The Fund also adopted a new Rapid Financing Instrument (RFI) for countries with urgent balance of payments needs arising from so-called exogenous shocks, such as natural disasters.

"We have acted quickly, and the new tools will enable us to respond more rapidly and effectively for the benefit of the whole membership," IMF Managing Director Christine Lagarde said in a statement. (Reporting by Lesley Wroughton, Editing by Chizu Nomiyama)

The Office of the Comptroller of the Currency (OCC) issued a report today on the actions by 12 national bank and federal savings association mortgage servicers to comply with consent orders issued in April 2011 to correct deficient and unsafe or unsound foreclosure practices.

The report, “Interim Status Report: Foreclosure-Related Consent Orders,” summarizes progress on activities related to the independent foreclosure review announced November 1, 2011, as well as other activities to enhance mortgage servicing operations, strengthen oversight of third-party service providers and activities related to Mortgage Electronic Registration Systems (MERS), improve management information systems, assess and manage risk, and ensure compliance with applicable laws and regulations.