Standard & Poor's released its arrears data on mortgage-backed securities to the end of May 2010, which not surprisingly, shows arrears of more than 30 days on prime RMBS eased slightly over the month to 1.44 per cent of outstandings. As S&P noted, arrears typically decline in the second quarter, as the seasonal impact of Christmas and the summer holidays wears off. However, what wasn't reported was the rapid decline in outstandings that has been underway since the peak was reached at A$168.7 billion, at the end of June 2007. At the end of May outstanding prime RMBS had fallen to just A$90.6 billion, reflecting an annualised rate of decline of 19.2 per cent.Given that prepayment rates on prime RMBS tend to average 23 per cent per annum, the rate of decline might not surprise. But after allowing for some A$38.2 billion of new issuance over the period, the actual rate of decline is 33 per cent per annum.