Market Snapshot July 29th

Treasuries and mortgages were better early this morning on the failure of the House to pass its "plan" yesterday as was expected based on comments frm Speaker Boehner through the day. Safety moves into treasuries as Congress and the Administration move closer to a possible default is driving longer dated treasuries lower and with them mortgage rates. There is a lot of talk as you know, that the US will suffer a decline in its credit rating by the rating agencies. Based on reports this morning 75% of investors in treasuries said they would not change their investments or jettison treasuries if in fact the downgrade actually happens.

At 8:30 more improvement in treasuries and mortgages with the advance GDP report for Q2 showing the economy grew just 1.3% against general estimates of +1.9%. Q1 GDP was revised lower, from +1.9% on the final read last month to +0.4%, a huge revision lower. Forecasts of 85 economists in the survey ranged from 0.9% to 2.9%. At $13.27 trillion in the second quarter, GDP has yet to surpass the pre-recession peak. The GDP estimate is the first of three for the quarter, with the other releases scheduled for August and September when more information becomes available. Consumer spending from April through June showed the smallest gain since the second quarter of 2009, when the economy was in recession. The slump reflected a 4.4% decline in purchases of durable goods like automobiles. Q2 employment cost index increased 0.7%; yr/yr up 2.2%.

Markets spent a lot of gray matter yesterday on the idea the Boehner plan would pass the House late yesterday; it didn't happen as conservative Tea Party members refused to go along even with Boehner flexing his leadership muscle. Even if the House would have passed its plan the Senate had made it clear it would be dead on arrival if it had reached the chamber. The next step isn't' clear; that said there are countless opinions about what will happen and what the impact will be under various scenarios.

President Obama is scheduled to talk about the impasse on the debt ceiling at 10:20 this morning.

More data at 9:45 when the July Chicago purchasing mgrs index hit; forecasts were for an unchanged index at 61.1, as reported 58.8; employment at 51.5 frm 58.7, new orders at 59.4 frm 61.2 and prices pd at 71.7 frm 70.5. Another weak report however the stock market didn't seem to react much to it, as the key indexes were already down hard from yesterday's closes. Treasuries and mortgage markets did add to their gains on the release, the 10 yr note yield dipped to 2.86% down 2 bp below its level prior to the report; mtgs jumped 4/32 (.12 bp in price)

At 9:55 the U. of Michigan consumer sentiment index, expected at 64.0 frm 63.8; was 63.7. The 12 month out expectations index at 55 frm 52. No reaction to it.

The bellwether 10 yr note this morning fell to 2.87% close to the 2.85% seen a month ago. With Washington in current gridlock on the debt ceiling investors are piling into safety positions, in US treasuries. That Congress and this Administration are at an impasse at the moment is surprising to me; I really believed they would act responsibly, always overestimate the will of politicians even though I set the bar exceptionally low.

At 9:30 the DJIA opened -130, the 10 yr note +20/32 at 2.88% -8 bp and mortgage prices +10/32 (.31 bp).

The bond and mortgage markets are testing last month's low yields this morning. Given the mess in Washington the potential for even lower rates has increased; however, we have to respect the technicals and the momentary double bottom in yields if rates don't push lower. The next few days are critical.

 

July 29: New BofA lawsuit; poor MI & investor earnings; LO comp issue has not gone away; at least rates are good

"Why do chicken coops have two doors? Because if they had four doors they'd

be sedans."

And thus starts Friday, with very good rates but a lot of news for folks in

the

mortgage banking and real estate business to be watching. First, of course,

the

debt crisis continues on in Washington - more on that below. Second, Monday

is August

1st, which is the end of the public comment period for the nearly

universally dreaded

QRM provisions. Those "in the know" believe that, as proposed, the

restrictions

are unlikely to fly. (There is more at QRMDoubts

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106833872767&s=8721&e=001rw9YRg

zyzPvlZ6kmivYyxGldJIsLgn8WVj5qnIAphK8d00CzyaB3BT5vSRmcgArlIw7xMiQq5P2Krj9eAA

3sogzZEsqPlkC2vA1HhNdskInQ5ijsxNlYe3yoca6kUiSK_nRTI9yKNUx5xp8WOk49fA==].)

Third, regulators say they've identified conflicts between Basel III and

parts of

the Dodd Frank Act relating to credit rating agencies. (Yes, those rating

agencies

that mistakenly rated billions of mortgage debt several years ago, and which

are

 providing information about downgrading government debt now.)

Representatives from

the SEC, the Federal Reserve Bank, and the OCC gave evidence to the House

Financial

Services Subcommittee on credit rating agencies in Washington on Wednesday.

Federal

Reserve Board associate director of banking supervision Mark Van Der Weide

told

the panel the Reserve Board plans to remove mentions of credit rating

agencies from

its rules "in the near future" but he said the process was being complicated

by

Basel III, which does mention credit ratings agencies. Section 939 A of the

Dodd

 Frank Act requires all federal authorities to review and replace references

to

credit ratings agencies in their regulations, with "alternative measures of

credit

worthiness". Van Der Weide said the Fed had received feedback from the

public and

commentators saying the act "could lead to distortion in the market". Great.

Fourth, Bank of America is facing a new securities-fraud lawsuit filed by

former

 Countrywide investors (including BlackRock and the California Public

Employee's

 Retirement System) that opted out of a $624 million settlement last year.

According

to the suit Countrywide misled shareholders about its finances and lending

practices.

For more go to: BankofAmerica

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106833872767&s=8721&e=001rw9YRg

zyzPvPJHpiBvwYG_clAQ8kHTC6KR8Vg7yAYyspfzR5a3jhaVEhIeYx_drjBSU-8tsGPYzTlzbdpr

OnSRbf95aHZ2suoLV8F1RapaYtjd11YByTGr8MVIlDzGmJo99wBT3iWjn-nHj5OCiFVy1RkK8xZt

ca0-REYZukVFBy4BWTkUCcNZ9QXc3Dj0DFYqJ4QoeADGFaZI9xltbRfLOrD6S1S4foCHcZp3hZ-z

EQ9Oo-HB7q7w==].

Returning to the debt crisis, and the apparent inability for our elected

officials

to send a budget to the president, the bond market seems focused on three

developments:

"(1) A downgrade of Treasuries by at least one ratings agency.  (2) A more

prolonged

downdraft in economic activity, caused in no small part by the uncertainty

raised

by the debt issues.  (3) Clinging to the notion that a full-scale Treasury

default

will be avoided, mostly because it's too painful to think otherwise." Paul

Jacob,

with Banc of Manhattan, points out that although these issues would normally

cause

the yield curve to steepen (leading to higher mortgage rates), but there are

a few

reasons why rates have not done much of anything. "For one thing, markets

are supposed

to look past labels and truly assess risks - has the U.S. long-term deficit

outlook

really changed over the past 6 or 12 months?  Then there's the state of the

economy

- things are slow, which would keep rates low. And lastly, China, a major

world

economic influence, continues to hold US dollars and securities, helping

prices.

 Very good points.

Corporate earnings for mortgage-related companies took a turn for the worse

in the

last day or two. Old Republic International (RMIC) swung to a $66 million

loss in

the second quarter on worsening claims costs in its troubled mortgage

guaranty business.

The insurer said Thursday it would likely place the mortgage guaranty unit

into

run-off mode if it does not manage to transfer the unit to a separately

capitalized

subsidiary before the end of August. CEO Aldo Zucaro in January predicted

the mortgage

guaranty industry won't be profitable until 2013.

PHH lost $41 million, in part due "fair value charges on mortgage servicing

rights

(MSR)" of $117 million. During the 2nd quarter the investor saw interest

rate lock

commitments (IRLCs) of $7.5 billion, compared to $8.4 billion in the second

quarter

of 2010. Its mortgage loan servicing portfolio increased to $174 billion as

of June

30, 2011, up from $156 billion at June 30, 2010. "While our servicing

portfolio

delinquencies rose slightly to 3.22% at quarter-end from 3.15% at the end of

the

 first quarter, they are still approximately half those of most other large

servicers.

Foreclosure costs remain elevated at $24 million, compared to $20 million in

the

 second quarter of 2010, driven by increased repurchase requests. As we

expected,

our mortgage origination market share declined from 4.3% in the first

quarter of

 2011 to 3.7% in the second quarter."

Genworth Financial lost $96 million in the 2nd quarter. The company said its

U.S.

mortgage insurance unit's operating loss worsened to $253 million in the

quarter,

compared with a loss of $40 million in the same period last year. The wider

loss

 came after the company set aside $300 million in reserves to cover bad

loans. Genworth

noted that the total flow of delinquencies declined 2 percent from the

previous

quarter, however.

One bright spot, if there is one, is that D.R. Horton, the largest U.S.

homebuilder,

reported a bigger-than-expected quarterly profit, helped by cost cuts. The

company

managed to cut its selling, general and administrative expenses to less than

12%

 of revenue.

One issue that seems to have quieted down is LO compensation. But it is in

no way

a dead issue as companies continue to adjust and fine tune the rules and

regulations.

National Mortgage News came out with a list of "Ongoing Reminders About

Compensation

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act" worth

noting.

Lenders are encouraged to remember that payments made by creditors to loan

originators

are not payments made directly by the consumer, regardless of how they might

be

disclosed under HUD's Regulation X, which implements the Real Estate

Settlement

Procedures Act. Because the long-term performance of the loans is not a term

or

condition of a loan it is permissible to go back and "ding," or take back

part or

all of the commission on a particular loan from a loan originator, if the

loan has

an early default because that's not a term or condition. "However, you

should be

 certain you are not violating wage and hour laws of the Fair Labor

Standards Act

and not violating state wage and hour laws as set forth by the Division of

Labor

 Standards Enforcement in California or for that matter, any other state."

The third item on this list is a reminder that compensation to originators

can vary

based on how the loan application was produced, for example, commissions may

be

higher for leads generated by the originator versus the company. Federal

Reserve

 Board staff states that as long as compensation is not based on loan terms

or conditions,

or a proxy, it is acceptable. If pricing of two loans differs, there may be

a concern

that channel is being used as a proxy for loan terms or conditions but other

factors

may justify differences. Be certain you can prove it in the event of an

audit. Fourth,

a mortgage loan originator is a person who arranges, negotiates or obtains a

loan

for a consumer and whose compensation is based on whether any particular

loan is

 originated. Thus there are two sets of requirements to be a loan

originator: (1)

arranging, negotiating or obtaining a loan for a consumer and also (2)

having compensation

based on any particular loan. Both sets of requirements must be met for a

person

 to be a loan originator, and this person may not pay some or all of the

third party

fees of a consumer or otherwise credit the consumer out of his own pocket.

Lastly,

it appears that for purposes of the Dodd-Frank rule affiliates are treated

as a

single person, so that when a lender acts as a mortgage broker and is thus,

a loan

originator for purposes of the rule where there is a party that is an

affiliated

 settlement service provider, such as a title company, the bona fide and

reasonable

charges received by the affiliated settlement service provider are also

considered

part of the loan originator compensation.

At least rates are behaving. Thursday rate-sheet MBS prices (Fannie 4's,

which contain

4.25-4.625% mortgages) rallied nicely, resulting in some intra-day price

improvements.

Treasuries opened higher following a mixed session overnight on poor

earnings and

weak economic news, as well as, on the uncertainty regarding the U.S. debt

ceiling.

The 10-year note closed with a yield of 2.95%.

We opened this morning with the 10-yr at 2.92%: Spain's credit rating

(remember

Europe? It isn't going away.) was put on downgrade watch by Moody's, and the

PM

announced they would dissolve the parliament and hold early elections in

November.

(Maybe the US should try that.) China may lend money to Greece. Over here,

the Tea

Party resistance sunk Boehner's bill before it ever made it to a vote.

Republican

officials will try to push something through again this morning, but all I

see in

the press is more jawboning.

GDP for the 2nd quarter came out at +1.3%, worse than expected, and the

Employment

Cost Index also came out, but as one would expect, stocks are selling off

again,

 and the 10-yr yield is down to 2.88%, and MBS prices are better by at least

.250

depending on coupon. Later we have the Chicago PMI and the final July

Michigan Sentiment,

seen slightly higher to 64 from 63.8.

WIFE'S DIARY:

Tonight, I thought my husband was acting weird. We had made plans to meet at

a nice

restaurant for dinner. I was shopping with my friends all day long, so I

thought

 he was upset at the fact that I was a bit late, but he made no comment on

it. Conversation

wasn't flowing, so I suggested that we go somewhere quiet so we could talk.

He agreed,

but he didn't say much. I asked him what was wrong; He said, 'Nothing.' I

asked

him if it was my fault that he was upset. He said he wasn't upset, that it

had nothing

to do with me, and not to worry about it. On the way home, I told him that I

loved

him. He smiled slightly, and kept driving. I can't explain his behavior I

don't

know why he didn't say, 'I love you, too.' When we got home, I felt as if I

had

lost him completely, as if he wanted nothing to do with me anymore. He just

sat

there quietly, and watched TV. He continued to seem distant and absent.

Finally,

 with silence all around us, I decided to go to bed. About 15 minutes later,

he

came to bed. But I still felt that he was distracted, and his thoughts were

somewhere

else. He fell asleep - I cried. I don't know what to do. I'm almost sure

that his

thoughts are with someone else. My life is a disaster.

HUSBAND'S DIARY:

Boat wouldn't start, can't figure it out.

If you're interested, visit my twice-a-month blog at the STRATMOR Group web

site

 located at www.stratmorgroup.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj

bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P

jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]

. The current blog takes a look at QRM and doubts about its passage. If you

have

 both the time and inclination, make a comment on what I have written, or on

other

comments so that folks can learn what's going on out there from the other

readers.

Rob   (Check out

http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=48fbh9gab.0.epg7qedab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep

ress%2Fdefault.aspx]

or www.TheBasisPoint.com/category/daily-basis

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=48fbh9gab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].

For archived commentaries, go to www.robchrisman.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=48fbh9gab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.robchrisman.com%2F].

Copyright 2011 Rob Chrisman.  All rights reserved. Occasional paid notices

do appear.

This report or any portion hereof may not be reprinted, sold or

redistributed without

the written consent of Rob Chrisman.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Join My Mailing List

[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Forward email

http://ui.constantcontact.com/sa/fwtf.jsp?llr=zy6u9cdab&m=1102827910937&ea=b

cahoone@globalhomefinance.com&a=1106833872767

This email was sent to bcahoone@globalhomefinance.com by

rchrisman@robchrisman.com.

Instant removal with SafeUnsubscribe(TM)

http://visitor.constantcontact.com/do?p=un&mse=001gYuebWlSSZMa7X7_YCXY1pkylq

TmggCt&t=001BJsfIC9OrW3Vz80ALeC95w%3D%3D&llr=zy6u9cdab

Privacy Policy:

http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp

Online Marketing by

Constant Contact(R)

www.constantcontact.com

Chrisman Inc. | 24-G West Main Street #386 | Clinton | CT | 06413

July 28: Debt issues' impact on Fannie, Freddie, REIT's; bankruptcy & mortgage website; new loan program & modification plan

Heard on the NPR radio show "Wait, Wait, Don't Tell Me" from Michael

Feldman: "If the US defaults on their debt and our rating is downgraded and

the US becomes a Third World Nation, will Nike finally open a plant here?"

"Rob, I can't figure out where the government is going with Fannie &

Freddie. Just look at the recent headline stories, like, 'High-ranking

members of the House Financial Services Committee have introduced a

bipartisan bill that encourages banks, Fannie Mae and Freddie Mac to rent

foreclosed properties as a way to reduce REO sales and stabilize house

prices and communities,' and, 'Fannie Mae flushed the multifamily MBS market

with liquidity in the first half by issuing $10.3 billion in commercial

mortgage-backed securities supported by new multifamily purchases.' On the

one hand, some elected officials are asking the agencies to become

landlords, and on the other hand, down the hall, other elected officials are

figuring out how to phase them out. It sure seems obvious that nothing is

going to be decided for another 16 months, if even then."

The inability of the government to come up with a plan for the debt ceiling

and the deficit has forced analysts to ask what may happen to the agencies

when "push comes to shove." From the agency MBS and debt markets

perspective, under the Housing and Economic Recovery Act of 2008, if an

Enterprise's liabilities exceed its assets under GAAP the Treasury provides

sufficient capital to eliminate that deficit in  exchange for senior

preferred stock. As we all know, both Fannie and Freddie have received

capital from the Treasury under this agreement over the past several

quarters

- but what happens if one or both lose money in the 2nd quarter, and request

more money and we don't have a higher debt ceiling?

As a few Wall Street research departments point out, HERA 2008 has a

"mandatory receivership" clause for Fannie and Freddie which takes them out

of conservatorship if certain conditions are met concerning assets versus

obligations and lack of ability to pay debts. Fannie's 10-Q for the first

quarter states, "FHFA has an obligation to place us into receivership if the

Director of FHFA makes a written determination that our assets are less than

our obligations for a period of 60 days after the filing deadline for our

Form 10-K or Form 10-Q with the SEC." It is highly unlikely that the debt

ceiling will not be raised before the possibility of Fannie & Freddie moving

from conservatorship to receivership becomes an issue. But every day that

the government fails to put forth a plan, concerns such as this one will

arise,  making investors a little more leery.

Others are saying, though, "Without some sort of serious entitlement reform,

we're likely to lose our AAA rating. Does that really matter? Is there

anywhere else for investors to go?" And thus equity and fixed income

investors are pondering and worrying instead of trading. Traders report that

liquidity is very light, and dealers are  struggling to handle both sides of

the risk.

Meanwhile, Fannie alerted clients of updates to its seller guide on the

Uniform Appraisal Dataset (UAD) and Uniform Collateral Data Portal

requirements, Qualified participants policy change, Performing modified

loans policy update, Nonstandard  payment collection options clarification,

Housing Goals data update, and other miscellaneous updates. Read all about

it at  SellerGuide

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZyB3_tmv5CP7RhcZ3qh-ITxoqXzLelDr4k_TRes_FIls2puObRcuteaTYZ9Bi6mHYAJfHCMyz

y-3mw-ku4drwFbxa-BjANhAf-1ZE_2MEdh75DSPllo-97MnUaxS7Bn_NRvJsSEhtZw2cmqQ9xxo3

tSCC709tz0IUNrGQd-6RagBjLhF88s6MaJ].

Fannie also updated its forbearance plan requirements, revised borrower

income eligibility guidelines for mortgage modifications, and reinforced the

availability of Home Affordable Modification Program (HAMP) for FHA-insured

mortgage loans:  Forbearance

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZxrVws6CWabLcOei5r6RHgyMv8CjBGs28-T41CTo46B2t43ZGTn58a58AsUcVbROJ9QsfjPir

fcH2YVdYRmXsJ6jKeoteWGEBTHZvt1jDyKCrO2eLizXcqhalNWrG7xgbLDzAzidRUDxFuykvvF4N

5dL1uV_rqSwYzqOZvFOaxUTAvjlwm6NEOU].

In addition, with the rollout of the new DU in August, the new median area

incomes will be updated:  DUMAI

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZwJCW2QNwSaQ2Y_PxARIvH1-EH3ttb2RgaM-C9m4q5EVc1i-Iq9ys66BLbGPyytKTbYXr5KBc

sJb3moRLK5Fz5zCfpcW8C0u5Chw0DN9HmQFl1g44w1UJt-BMJEX2WF7RS9TBpx-M0Z35tvFQMlA4

QZirPSjF5Zss0=].

Mortgage REITs have seen their prices improve in 2011, and have been viewed

as a  powerful force in buying mortgage-backed securities. But their stock

prices have come under pressure this week due to the potential downgrade of

U.S. government debt. For example, two of the most prominent stocks in the

group, American Capital Agency and Annaly Capital Management, fell as much

as 2.5% on Monday alone. Perhaps this represents a good buying opportunity,

especially with the dividends that some of them pay - around 19% in the case

of AGNC. (They accomplish this through leveraging a strong balance sheet to

buy a portfolio of government-sponsored housing agency  paper on margin.)

But if Ginnie, Fannie, and Freddie securities are downgraded,  their prices

will drop and yields rise - not good for the REIT. It may find that it needs

to put up more money to replace the value (like a margin call), and

"collateral haircuts" have increased for U.S. Treasuries, agency paper and

foreign sovereign  debt.

Mortgages...bankruptcies... are the two of them intertwined? You bet. The

National Consumer Law Center has launched a useful new resource for the

bankruptcy community called the Bankruptcy Mortgage Project. Those likely to

find it handy include judges, consumers, trustees, mortgage servicers,

attorneys, and academics. It collects all sorts of documents related to

mortgage issues in consumer bankruptcy cases and provides easy, free access

to various local rules, forms, general orders, and court opinions:

 Bankruptcy&Mortgages

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZxt3qeL__XckykALmG-nqTtowwGK4Kz-kD161entx_UhZ_qIvP1LfVeFhZX7mOLL4G0KKhrjv

nUXWgda8DkjTfkax9yVsbC4_5YDkRnI9Vab7sCv1fuCThPU5XQNNPbUHk=].

Real estate and mortgage fraud - don't do it. They'll hunt you down. And

take ugly mug shots.  Huh?WhereAMI?

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZzvluprs1oy4KfQSoPVyLGF9uAHGuDPdp3LAid7eQLV7D8sXZwR-jzTpBRrhx8K6Q_3l9WAVi

xgPi6c68sTqiDj26xBr0FAjfJv_Aqy9Ihf1RB6GL7XNtrIjomoMBeBbL63D_1pF-G4L1ejX_jxgX

TUNEUoDjiRaymaMfCLQzQSwfMrX2sdptw7Me0_ByZM2OQ=]

It has been a while since MERS has been in the mainstream news. But in the

last week MERS (a unit of Merscorp and owned by the agencies and several

large mortgage

investors) forbade members to file any more foreclosure actions in MERS's

name.

It also required mortgage servicers to obtain mortgage assignments and

record them with county clerks before beginning foreclosures. Details can be

found here:  MERS

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZy4TrxDrFiP9FWI4PaVhW7CWmbdIVlz9UF7LBjfUT2yyWiOzOGNmiXTjwLU5Z5Tj42dfgxJF_

fIKFWRV3Ur533A8lwL2RYDG-qwY8BuGVbJnUYWVwgHc3meNSJjuPftl_oW93KPPWE4SHGbTcqlIg

44InIPZtxh2AVbtE94ERlCAYRHIbFjq6NlB23ChBusBR0=].

SIFMA provided comments to the Board of Governors of the Federal Reserve

System on proposals relating to amendments to Reg. Z (TIL) that would

implement changes  to the TILA made by the Dodd-Frank Act:  SIFMAComments

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZz4dyaokXwctbSFLN9ZeEJCIToV64dOYFv8oNLN0su4TF7uYouQZ9aepYwyeixmAbsGsX2yP4

wb3rlA4hHv_c5mFpMTzCNdJeJseWl4cL3bgPVYTnKTuM7Uavxo0KGyR1RXbsZLK2g8hftUR5XH9K

D9].

Loan servicer Ocwen Financial announced the rollout to 33 states of a new

loan modification program for borrowers with underwater mortgages. Its

"Shared Appreciation Modification"

(SAM) program, writes down an underwater borrower's principal balance to 95%

LTV, thereby creating home equity. Then, over three years, the written-down

portion is forgiven in one-third increments, so long as the homeowner stays

current on mortgage payments. Later, when the house is either sold or

refinanced, the borrower must share 25% of the appreciation with the

investor of the loan. Ocwen believes this  approach won't reward borrower

delinquency, which is always a concern when offering a loan modification.

In Maryland, WEI Mortgage Corporation announced the creation of "custom term

mortgages that are tailored for each borrower's unique needs. This is a

unique option for qualified borrowers that have already paid a significant

number of years on their existing mortgage and allows the borrowers to

refinance into a lower interest rate without unnecessarily adding additional

term. For example, if a borrower has a 30 year fixed mortgage and has paid

it for 8 years, WEI is able to help the borrower take advantage of the

current low interest rate environment and refinance the remaining

22 years into a custom 22 year term mortgage. This custom option positions

the borrower to pay off the new mortgage in the same time frame as the

original mortgage." Check it out at www.weicorp.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106816922489&s=8721&e=00118hbhy

zuHZwW3NlkFMCQzfN-9ZQh7RKWXXPNkwgCXwFejMaFieLKQA2H2t9nHUmL9qCu5V8dPrCIJwc1P3

WI7IT4n-c9vLOQzg09DqY6EgZ75vyr8WA2nQ==].

Stocks and bonds both went in the same direction Wednesday, both impacted by

the  uncertainty of the budget and the prospect of a ratings downgrade. Gold

prices rose to another record, the DOW was down about 200 points, the 10-yr

T-note down

 .250 (2.98%), and MBS prices were down/worse about .250-.375. (It is

unusual for MBS prices to move as much as, or more than, Treasury prices.)

"US obligations are not a pristine a credit as they use to be, but they are

the 'Best Looking Horse in the Glue Factory'", said strategist Jeffrey Ho.

That is a good quote. But wait

- let's not forget Europe!

Yesterday afternoon's released of the Fed's Beige Book wasn't much cause for

excitement, saying that economic activity is continuing to grow but at a

slower pace. "Most residential real estate activity was little changed and

remained weak," and home  prices were flat or declining for Districts that

reported this information.

While the markets are focused on the US debt negotiations, we still have

some economic news out today along with a $29 billion 7-year note auction.

(Yesterday's auction did not go so well.) We've already had Initial Jobless

Claims; later we have Pending Home Sales. We find the 10-yr nearly unchanged

at 2.97% and MBS prices are quiet  as well.

There was a major league player in the 1930's named Mel Famey. He was a

dominating pitcher but unfortunately he also had a severe drinking problem.

On good days, he was unhittable but on bad days...not so much.

I can't remember what team he was on, but I know they were in series

contention for the pennant, and the race went right down to the wire. Back

in those days, of course, relief pitchers were uncommon, and a pitcher was

expected to go the distance.

As the game went along, Mel's team held a one run lead until the bottom of

the 9th.

Mel had, unfortunately, been downing beer between innings and was clearly

not as  sharp as he'd started out.

In the 9th the first batter he faced hit a home run, and the score was tied.

That definitely sobered him up, some, and he got the next two batters out on

sloppy blooper hits that his middle infielders caught, realizing he was

inebriated and stepping  up their game. Two outs - but then he walked the

next three batters. His coach was fuming; the crowd was silent.

Bases loaded, he refocused his bleary eyes and managed to throw a few

strikes. Finally, the count was 3-2. Mel came set and threw a wobbly pitch

that went wide - ball 4, the winning run walked in, the game and season

over. As the jubilant winning team walked off the field, they passed the

dugout and saw evidence of Mel's drinking,  as beer cans were piled on the

bench and scattered on the ground.

One player shook his head in amazement and pointed the debris out to his

teammates:

"Check it out - there's the beer that made Mel Famey walk us."

If you're interested, visit my twice-a-month blog at the STRATMOR Group web

site  located at www.stratmorgroup.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106435366068&s=4179&e=001SVt-lj

bp53436QjxD9vbwURtIPPjV05jEcEKyBN3SjS2forXe0C_foO8RjEV-Uye0N7Z_Sh1il0SRXPx6P

jQauayNXQjni-Hc9Sseu-hhZcR1ujeZyAEpw==]

. The current blog takes a look at early actions taken by the new CFPB and

the political situation affecting it. If you have both the time and

inclination, make a comment on what I have written, or on other comments so

that folks can learn what's going on out there from the other readers.

Rob

(Check out

http://www.mortgagenewsdaily.com/channels/pipelinepress/default.aspx

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=z878wzgab.0.epg7qedab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.mortgagenewsdaily.com%2Fchannels%2Fpipelinep

ress%2Fdefault.aspx]

or www.TheBasisPoint.com/category/daily-basis

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=z878wzgab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.thebasispoint.com%2Fcategory%2Fdaily-basis].

For archived commentaries, go to www.robchrisman.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&t=z878wzgab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0660&p=http%3A%2F%2Fwww.robchrisman.com%2F].

Copyright 2011 Rob Chrisman.  All rights reserved. Occasional paid notices

do appear.

This report or any portion hereof may not be reprinted, sold or

redistributed without the written consent of Rob Chrisman.)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Join My Mailing List

[http://visitor.r20.constantcontact.com/email.jsp?m=1102827910937]

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~~

Forward email

http://ui.constantcontact.com/sa/fwtf.jsp?llr=zy6u9cdab&m=1102827910937&ea=b

cahoone@globalhomefinance.com&a=1106816922489

This email was sent to bcahoone@globalhomefinance.com by

rchrisman@robchrisman.com.

Instant removal with SafeUnsubscribe(TM)

http://visitor.constantcontact.com/do?p=un&mse=001gYuebWlSSZMa7X7_YCXY1pkylq

TmggCt&t=001-TJy_9WjH7QjZGNGdpZj6A%3D%3D&llr=zy6u9cdab

Privacy Policy:

http://ui.constantcontact.com/roving/CCPrivacyPolicy.jsp

Online Marketing by

Constant Contact(R)

www.constantcontact.com

Chrisman Inc. | 24-G West Main Street #386 | Clinton | CT | 06413