December 29: A few good mortgage studies; one wholesaler rolls out HARP 2.0 and investors' thoughts on 2.0's impact

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

Who says that folks in the mortgage business can't rhyme and rap

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109019318003&s=8721&e=001jO96TH

b7I2K9kAx5DcybWLBNYSfN70JT6Sq4sfB3oCROHbirCcQUmebIw7GN4FeNM1XWrxC59Nq4T-1iBi

W493amX-YVQBPoypY1NIghmlRRqJNlDihjH4oTfHMFaEDqFuxKQxcanJSfBXAZglsiwQ==]?

If you're away from your home, and you come back and find that a pipe has

burst,  and the place is flooding, do you a) fix the leak, or b) raise the

roof? I realize that the situation is more complex than that, but the White

House plans to ask Congress for an increase in the government's debt ceiling

to allow the United States to pay its bills on time. Didn't we just go

through this? The approval is expected to go through without a challenge,

given that Congress is in recess until later in January and the request is

in line with an agreement to keep the U.S. government funded into 2013. The

debt is projected to fall within $100 billion of the current cap by December

30, when the United States has $82 billion in interest on its debt and

payments such as Social Security coming due. President Barack Obama is

expected to ask for authority to increase the borrowing limit by $1.2

trillion, part of the spending authority that was negotiated between

Congress and the White House this  summer. Under the agreement struck in

August during the showdown over the government's debt limit, the cap is

automatically raised unless Congress votes to block the debt-ceiling

extension.

I mentioned this before, but wanted to mention it again: it seems that MI

will stop being deductible in 2012 unless Congress acts - and they're on

recess into January.

I received this note from a reader on the west coast: "From my

understanding, the PMI deduction will be completely eliminated and will not

be available to any taxpayer.

 This is definitely something I have an issue with, as it next to impossible

for  a first-time buyer to get a home anywhere without paying PMI, but

unfortunately, I don't make the rules. Since there doesn't appear to be any

last minute tax battles in Congress like there was last year, I don't

foresee this changing at least for  the 2012 tax year."

And speaking of Congress, a year and a half has gone by since the Dodd-Frank

financial reform act was signed into law, "but barely a quarter of the rules

in the legislation have been finalized, though federal regulators are

rolling out key components of  the bill

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109019318003&s=8721&e=001jO96TH

b7I2Kq2erREmVjBFqPIXzn3ucw7BiqTvBcjmqVU4d1DAGUa3R1qlw08lIsCldGIRtVer_cT4gtpp

HghhzGUN_KJs_uvtTU2RHwvqs58s7o7jQP3FdaISMNZW-po5Pc9KeJErfMUX8PlM8NRDevzQlLmq

PFaWvlyH1ABmO3rbfoNyzZ-C62b6EibXAjhsseOm_FKqpW1If4lwWtpghyt0ftVarMdCciGQk0gd

pQ3XVIc8SzG_Z-XeXYw_Y0ShF_JgStoam8msQjYM9DEA==]."

Holistic financial counseling - counseling that focuses on a borrower's

entire financial situation - can prevent both foreclosures and re-defaults,

according to a recent  White Paper study sponsored by Florida-based special

servicer, Outreach Financial Services, and authored by STRATMOR's Dr. Matt

Lind. According to the white paper, servicers avoid net losses of about

$3,894 on an average $210,000 loan for each borrower who receives basic

counseling. However, this figure increases to between

$5,754 and $7,147 when borrowers receive holistic counseling aimed at their

total debt and spending patterns. Read it at Counseling

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109019318003&s=8721&e=001jO96TH

b7I2KsFivK3OZRBvEkCuVxdHUi-HVkg8mRXCZBLz5Oo7OlDiKo9DMLsIq3F5nQT_H6PPcx-dmSdz

omd4kWPZk2jEzLYk4_IeEbA6D8-BP6sKR0ReX-fRwDBZn75raCR6w7_XZgCDorVXxGbA==]

or contact Matt Lind at Matt.Lind@Stratmorgroup.com

[mailto:Matt.Lind@Stratmorgroup.com]

if you have questions.

And here's another study to read over the upcoming 3-day weekend: the MBA

and the Research Institute for Housing America (RIHA) released of a new

exclusive report:

"The Great Recession and Attitudes Toward Home Buying." "The report finds

that almost

80 percent of American households believe that now is a good time to buy a

home,  despite high unemployment, slow economic growth and problems plaguing

the economy.

This positive attitude is attributable to low house prices and low mortgage

interest rates. The data shows that the pattern of home-buying sentiment

during the current recession looks similar to that of past recessions and is

consistent with the long-run average level." This is good to know, and it is

good to know that it is free at and available for download at

www.housingamerica.org

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109019318003&s=8721&e=001jO96TH

b7I2Jg6vgDQhQS7HLOq6707eTVBeIUxcGCEagJjkkwfUPAFBopNz4KAkc12FuvN_g__TC6cPt-TQ

k4H1SdzIiqZAG9wjRPUPSRXty3FdL7jbbbgFKlGKxKEULy].

Most lenders have resigned themselves to not seeing any HARP 2.0 business

until March (although see below!), when it is incorporated into the

automatic underwriting systems and the market figures out where the loans

should be priced. But investor chatter continues, with some examining the

exact percentage of loans being processed through DU Refi Plus, and whether

rep and warrants related to "ability to repay"

 falls under "underwriting" or "employment/income". We know that Fannie Mae

has reported that around 30% of their HARP refinancings have used automated

appraisals, which were only available through DU Refi Plus until recently.

Given this statistic, it is reasonable to assume that DU Refi Plus

applications consist of at least 30% of HARP refinances but the true number

is actually higher since the coverage for  automated appraisals for Fannie

Mae is somewhat limited. Although it is difficult to gauge the exact number,

analysts put the number at around 30-50% of total HARP refi applications.

The second question investors are interested in answering is whether the

"ability to repay" putbacks would fall under "underwriting" or

"employment/income". Note that buyback statistics are not restricted to HARP

putbacks and trends across originators may vary. In the context of this

information, the Mortgage Bankers Association states the following trends in

"Employment/Income" related claims: both Fannie and Freddie verify

employment (VoE) on stated income products, Fannie makes use of bankruptcy

documents to identify income issues, and Freddie uses outside investigators

to locate past employers. So the "employment/income" related claims are

related to employment verification (whether the borrower has a job) or

income inconsistencies (i.e., reported and actual income are different). The

"ability to repay" is ascertained after income and employment information is

gathered and buyback requests related to this specific issue thus falls

under "underwriting".

United Wholesale Mortgage (UWM

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1109019318003&s=8721&e=001jO96TH

b7I2IMwV95tOdZHJQ4dF5cSR8QHtYZCm4Erzsj2Mr7153RT5HDvVv2Ub8qVo4nKT5tXIy7i_wp9S

qnjBQVF5_WQz5YcMqyA-6mj9U=])

has announced that it has successfully implemented the government's

enhancements  to the HARP 2.0 that went into effect Dec. 1, 2011. Mat

Ishbia, president of UWM said, "There are very few lenders that have

implemented HARP 2.0 thus far, and we don't expect to see immediate adoption

because of the technology, staffing and liquidity implications. At UWM, we

are committed to offering our customers the products they need to satisfy

marketplace demands and grow their business." The press release noted, "UWM

added HARP Phase II to its broker portal, EASE (Easiest Application System

Ever), where brokers can price and determine eligibility via EQ (Easy

Qualifier).

The primary changes to HARP are the reduction of pricing adjustments on all

HARP  loans which allows borrowers to save more money than they could have

before, removing the 125 percent CLTV restriction, and the ability to not

require appraisals on many loans. Notable is that Fannie Mae and Fannie

Mae's Desktop Underwriter (DU) system will not be updated to accept

unlimited loan-to-value applications until March of 2012, and UWM will roll

out that enhancement once Fannie Mae's system is ready."

And rates are certainly good! Yesterday the yield on the 10-yr shot down

through  2.00% and closed at 1.91% on thin holiday volume and a lack of

economic news. Numerous investors had price improvements, certainly helped

by continued Fed MBS buying.

Thomson Reuters noted, "When volume is as low as it is, fewer people (and

fewer

dollars) are required to move market levels such as stock indexes, bond

yields, or MBS prices."

The economic calendar for today includes Jobless Claims at 8:30am (expected

higher to +375k but came in +15k to 381k), 9:45AM EST brings December

Chicago Purchasing Managers index (expected 61.0 vs. 62.6 previously) and

10AM EST Pending Home Sales for November (only +1.5 vs. +10.4 prior print).

Ahead of all that rates are pretty much unchanged from Wednesday's close

with the 10-yr at 1.92% and MBS prices "unched".

A man had just settled into his seat next to the window on the plane when

another man sat down in the aisle seat and put his black Labrador Retriever

in the middle seat next to the man.

The first man looked very quizzically at the dog and asked why the dog was

allowed on the plane.

The second man explained that he was from the Police Drugs Enforcement

Agency and that the dog was a 'sniffing dog'.

"His name is Sniffer and he's the best there is. I'll show you once we get

airborne, when I put him to work."

The plane took off, and once it has leveled out, the Policeman said, "Watch

this."

He told Sniffer to 'search'.

Sniffer jumped down, walked along the aisle, and finally sat very

purposefully next to a woman for several seconds.

Sniffer then returned to his seat and put one paw on the policeman's arm.

The Policeman said, 'Good boy', and he turned to the man and said, "That

woman is in possession of marijuana, I'm making a note of her seat number

and the authorities will apprehend her when we land."

"Gee, that's pretty good," replied the first man.

Once again, the Policeman sent Sniffer to search the aisles.

The Lab sniffed about, sat down beside a man for a few seconds, returned to

its seat, and this time he placed two paws on the agent's arm.

The Policeman said, "That man is carrying cocaine, so again, I'm making a

note of his seat number for the police."

"I like it!" said his seat mate.

The Policeman then told Sniffer to 'search' again.

Sniffer walked up and down the aisles for a little while, sat down for a

moment,  and then came racing back to the agent, jumped into the middle seat

and proceeded to defecate all over the place.

The first man was really disgusted by this behavior and couldn't figure out

how or why a well-trained dog would behave like that. So he asked the

Policeman, "What's going on?"

The Policeman nervously replied, "He's just found a bomb."

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 discusses the time frames for borrowers returning to

A-paper status after a short sale or foreclosure. 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=txvhl8iab.0.epg7qedab.zy6u9cdab.8

721&ts=S0720&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=txvhl8iab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0720&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=txvhl8iab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0720&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.)

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

~~~~

Chrisman Inc. | 326 Mission Ave. | 326 Mission Ave. | San Rafael | CA |

94901

Market Snapshot 12/29/2011

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

ADVICE:  For loans being locked for 15 - 30 days, we suggest…(more)

Early this morning the 10 yr and mortgages opened a little weaker; Italy's auctions didn't do as well today as the shorter term auctions did yesterday. Italian 10-year bonds fell, pushing yields toward the highest this month, after the nation raised less than its maximum target at an auction of debt due between 2014 and 2022. Portuguese and Spanish securities also declined and the euro weakened to a 15-month low against the dollar after Italy agreed to pay a yield of 6.98% on securities maturing in 2022, close to the 7% level that prompted euro-area peers to seek bailouts. The Italian 10 after the auction is trading over 7.00% at 7.07%.

Italy did sell its debt offerings, a good thing, but the rate was higher than thought and in after market trade the rate is now above 7.00% that markets have set as a benchmark for its 10 yr debt offerings. The reaction has been muted so far this morning, except in the currency market where the euro currency continued to decline to the weakest level since Sept. 2010 against the dollar,  and the weakest against the yen in 10 yrs.

At 8:30 weekly jobless claims were expected to be up 4K, as reported claims increased 15K to 381K. Continuing claims also increased, to 3.601 mil frm 3.567 mil the week before. The 4 wk average, a smoother look at claims, at 375K down from 380,750. Claims still declining even with the increase; there was no noticeable reaction to the report in either stocks or interest rates.

At 9:30 the DJIA opened +30, the 10 yr note unchanged and mortgage prices -2/32 (.06 bp).

The last key economic report of this year at 9:45; the Dec Chicago purchasing managers index. In Nov the index hit a recent high at 62.6, the index was expected to have declined in Dec to 60.1. As reported the index hit at 62.5 frm a revised 62.6 in Nov; new orders index at 68 frm 702, prices pd at 65.7 frm 60.2 and employment at 58.6 frm 56.9 (any index over 50 is considered expansion). There was little to no reaction to the data.

At 10:00 the NAR reported Nov pending home sales (contracts signed but no yet closed), expected up 0.6%,

The rest of the day bonds and mortgages will track equities; the stock market is holding a gain of about 65 points at 10:00. Trade should be contained through the rest of the session. Technically, the US 10 yr escaped from breaking down yesterday with the rally that returned the 10 below 2.00%. If equity markets were to fall the 10 and mortgages will improve, but not much.

 

December 23: New agency borrowers will pay for payroll tax cut extension; more agency news; catch the wave - move back in with your parents

Wanna save money? Let our professionals show you the benefits of refinancing today! Apply http://globalhomefinance.com/apply.php !

The Census Bureau reports that between 2005 and 2011, the proportion of

young adults living in their parents' home increased. The percentage of men

age 25 to 34 living in the home of their parents rose from 14% in 2005 to

19% in 2011 and from 8% to  10% over the period for women. Realtors and loan

originators pay attention to this stuff, as it impacts their advertising and

pool of potential clients. Similarly,  59% of men age 18 to 24 and 50% of

women that age resided in their parents' home in 2011. (College students

living in a dormitory are counted in their parents' home, so they are

included in these percentages.) In general, the percent of all households

that contain just one person has risen from 13% in 1960 to 28% in 2011.

My Dad, who grew up during the Depression, often wonders, "When will people

stop  blaming others for their own problems?"

http://www.courthousenews.com/2011/12/22/42466.htm

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108998861536&s=8721&e=0010NIDNV

5ts8-KFUXc9ZeDDMXxR0vfdGNqR-2COfBZkhkauSLwYMfl6EeBd1N1-i31VKfZicku3PJ9ER3Y9P

DQuhgpgb0aiAZh84doiOOk2oW1Y_RkXfZEq6IHyuVWbRGgpU3wMIzt3tsmveSZiwcD6XV3gO3Ly8

uW]

House Republicans "caved" to demands by President Barack Obama,

congressional Democrats and fellow Republicans for a short-term renewal of

payroll tax cuts for all workers.

The breakthrough almost certainly spares workers an average $20 a week tax

increase January. Not only do we have to watch Congress go through this

thing all over again in two months (by 2/29 - maybe we should put the Super

Committee on it!), but in  a clear problem for the mortgage industry, its

$33 billion cost will be covered  by an increased fee on mortgages backed by

Fannie Mae, and Freddie Mac. (No, I don't know by how much.) I have news for

Congress - new borrowers shouldn't bear  the brunt of paying for this, and

if you jack up agency mortgage costs high enough, there won't be enough

guarantee fee income because borrowers won't borrow - and let Washington see

how that helps our housing sector. I'll get off my editorial soap box now...

Many in the industry believe that Fannie and Freddie start a new program to

shed  the credit risk of the mortgages they guarantee in the private sector.

Folks say it should be simple to understand, not affect the existing agency

MBS market, use existing financial technology, and not need legislative

approval. It should also  factor in that regulators will want to control

loss mitigation and mortgage modification.

Security dealers have suggested issuing GSE unsecured debt whose cash flows

mimic a first loss piece, with some caveats. The coupon of this tranche

comes from the  guarantee fee of the referenced collateral, severities are

fixed to remove uncertainty about liquidation timelines, prepayments are

passed on to keep the structure simple, and the tranche is sold for cash to

remove counterparty risk. The cash flows to existing agency MBS are not

affected; the investor is taking on unsecured GSE credit risk "pari passu"

with existing agency debt. The ultimate goal will be to use this program to

shed credit risk of newly issued agency mortgages. In the dealer's mind, the

economics work for the GSEs to place the credit risk of current

well-underwritten collateral in the private markets - but not the older

stuff.

The American Banker, in a story written by Jeff Horwitz and Kate Berry,

noted that Fannie "has acquired the rights to service hundreds of billions

of dollars of loans and transferred responsibility for managing them to a

select group of large subservicers"

including the August deal with BofA for $73 billion of servicing. "Why the

secrecy?

Fannie is 'under a lot of political pressure, and wants to keep everything'

quiet, says Paul Miller, managing director of FBR Capital Markets. To

Fannie, yanking servicing rights from big banks has other appeal, Miller

says. Fannie executives 'don't like how Bank of America, or any other major

servicer, is servicing the loans,' he says.

'The biggest servicers are totally dysfunctional and putting no resources

into the process.'" The recent servicing transfers are simply the best way

to protect itself from losses resulting from botched loan management, says

Amy Bonitatibus, a spokeswoman for the company.

While bills in Congress aim to wind down Fannie Mae and Freddie Mac, they at

the  same time look to the FHFA to draft industry standards for private

mortgage securitization.

For example, one proposal would have the FHFA establish a U.S. database for

title transfers and create a standard pooling and servicing agreement, and

another would have it develop standards for mortgage servicers, various

classes of loans based  on default risk and qualification standards for

firms that securitize mortgage bonds. (Yet another related bill in the

Senate would offer foreign investors a 3  year "homeowners visa" if they

invest $500k in cash into a home and stay in it for at least 6 months.)

There seems to be a huge number of investor updates this week - I can't list

them all. But here is a smattering of them in no particular order:

PHH told clients that, "Cash Out Refinance transactions involving

installment land contracts are not eligible. When a land contract is being

paid off, the transaction must be considered either a purchase or a rate and

term refinance." In addition,  "for Interest Rate Reduction Loans (IRRRLs),

an appraisal is not required if (various) requirements are met such as if

the existing loan being refinanced is a PHH-serviced loan, and the new

interest rate is lower than the previous interest rate."

Home Savings of America posted the revised VA loan limits on its wholesale

website, http://www.hsoawholesale.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108998861536&s=8721&e=0010NIDNV

5ts89MY-ipzcoCpAnWjgZo8iTm9Hdw3d-qWsBXardmJs-KfhC76l3ZkJEDqOUwleGr36qp_eVmof

gUD0X0Bthp8jL60ud0XStbdxG-mi9AViLLsw==]

>>Resources>>Miscellaneous, and reminded brokers that the loan limit

>>Resources>>revisions do

not apply to VA IRRRLs ('Loan Limits' means the maximum allowed base

mortgage for a veteran with full VA eligibility benefits and no down

payment. For all VA loans, the sum of the property equity/down payment plus

VA eligibility must be at least  25% of the base loan amount payment.)

U.S. Bank told clients that starting 1/1, "for lenders that close FHA loans

in U.S.

Banks name, certain FHA Streamlined Refinance loan transactions submitted to

U.S.

Bank Home Mortgage Wholesale Division for underwriting will be subject to

special underwriting guidelines.  This change does not impact Correspondent

Lenders utilizing their own DE authority to approve the transaction. The

special underwriting guidelines that will apply are: FHA Streamline

Refinance Applications with borrower FICO scores < 660 will require full

underwriting of income, employment, assets and credit with supporting

documentation.  LP or DU (TOTAL Scorecard) must be utilized to score the

loan and to indicate the Accept or Refer documentation level.  Appraisals

will

not be required.   TOTAL should be processed as a rate and term refinance.

Enter

 the Original Property Value when running TOTAL.  This value is obtained

from the Refinance Authorization Results on the FHA Connection.  Refer

findings will be manually underwritten utilizing FHA manual underwriting

documentation requirements. Borrowers with FICO scores > 660 remain eligible

for FHA Streamline Refinance reduced documentation.

Existing minimum FICO score requirements are still applicable."

Fifth Third Wholesale Lending will "accept a credit report in lieu of a

payoff statement for all FHA loan transactions on loan submissions. The

updated checklist is attached and will be available on

www.53.com/wholesale-mortgage

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1108998861536&s=8721&e=0010NIDNV

5ts89u81Xsjfg_5WWm3h1158sugWUcAhSCi5cRxpvhWm9lsBpeedH-KMd7qXY876Us3MBaSY5WWO

Mp_dYIjH8aKbbYnWR3objTt2BtyeqIsmlPzTHJhQYnbTSC].

And for all Conforming and Portfolio Products: Combined Fifth Third Liens >

$1MM, two appraisals are required when the combined amount of Fifth Third

liens originated through any Fifth Third entity is > $1million. Subordinate

financing held with a  lender other than Fifth Third is excluded from the

total amount of combined liens

Note: For transactions involving a HELOC, the high credit limit must be used

to calculate the combined loan amount." Lastly, the maximum loan to value

limit is 95% for the LTV/CLTV on all attached housing including PUDs,

Condos, and HARP Programs."

Please refer to the product guidelines for additional restrictions.

On the correspondent side, Fifth Third Mortgage "does not require a cushion

for mortgage insurance escrows. After purchase of the loan, Fifth Third

Mortgage Company's Servicing Division will perform an analysis of the

borrower's escrow account using the aggregate accounting method, and will

provide an Escrow Disclosure Statement  as required by the regulation. The

Initial Escrow Account Disclosure is a required attachment to the HUD-1 on

escrowed loans. A two-month cushion is required by Fifth Third Mortgage

Company on escrowed tax and homeowners insurance unless otherwise  mandated

by state law."

Flagstar reminded its brokers  that, "Effective for VA loans registered on

or after January 1, 2012, if two or more veterans are using entitlement to

obtain VA financing and the veterans' funding fee factors are not identical,

the loan is ineligible for approval, closing and/or purchase by Flagstar. At

this time, Flagstar's systems are capable of calculating only one funding

fee factor for the entire loan, so exceptions cannot be made."

Aurora rolled out a jumbo product this week. Aurora Bank FSB's program

highlights include, "15 and 30 year fixed rates, 5/1, 7/1, 10/1 Hybrid ARMS,

maximum $2,000,000 loan amount, O/O 1-2 units, O/O , 80 % LTV available at

700 Fico Score for a maximum of $1,000,000 loan amount, cash out allowed up

to 60% LTV. In order to participate, all appraisals must be ordered by the

Correspondent through an Aurora Bank FSB approved Appraisal Management

Company (AMC).  The AMC completed appraisal will be subject  to a full

underwrite as a part of the non-delegated Jumbo process - if you have  any

questions, please contact Client Support at

corr.clientsupport@auorabankfsb.com

[mailto:corr.clientsupport@auorabankfsb.com].

Yesterday we saw that the University of Michigan Consumer Sentiment index

for the end of December rose to 69.9 from the 67.7 reading earlier this

month, up from 64.1 in November, and higher than the 68.0 expected by

economists. The Conference Board Leading Economic Indicator Index increased

0.5% in November to 118.0, following a 0.9% increase in October. Lastly, the

FHFA House Price Index fell .2% in October, and September was revised

downward to reflect a 0.4% increase, rather than the 0.9% increase

originally reported. Mortgage-backed securities (MBS-agencies) had a decent

day.

This morning Durable Goods, always a volatile number, were up 3.8% in

November, but ex-transportation it was only +.3%. November Personal Income

was +.1%, Personal Consumption was +.1%, both a little less than expected.

After that, 9AM CST offers up October New home sales that are expected to

also exceed prior reads. After the news we find the 10-yr at 1.98% and MBS

prices worse by about .125-.250 - but who would lock today?

Three men died on Christmas Eve and were met by Saint Peter at the pearly

gates.

"In honor of this holy season," Saint Peter said, "You must each possess

something that symbolizes Christmas to get into heaven."

The first man fumbled through his pockets and pulled out a lighter. He

flicked it on. "It represents a candle," he said.

"You may pass through the pearly gates," Saint Peter said.

The second man reached into his pocket and pulled out a set of keys. He

shook them and said, "They're bells."

Saint Peter said, "You may pass through the pearly gates."

The third man started searching desperately through his pockets and finally

pulled out a pair of women's panties.

St. Peter looked at the man with a raised eyebrow and asked, "And just what

do those symbolize?"

The man replied, "These are Carols."

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 discusses the time frames for borrowers returning to

A-paper status after a short sale or foreclosure. 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=axmxx9iab.0.epg7qedab.zy6u9cdab.8

721&ts=S0708&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=axmxx9iab.0.v7uif6dab.zy6u9cdab.8

721&ts=S0708&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=axmxx9iab.0.fpg7qedab.zy6u9cdab.8

721&ts=S0708&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.)

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