June 30: View on how to fix the economy; More settlement news - and CW has cost BofA how

by Rob Chrisman

[I am away from the computer on a daily basis, and my access to e-mail is

sporadic and not timely. In my place are daily commentaries from a series of

very knowledgeable mortgage industry people with different backgrounds, and

they have been given very little direction about what to write about - the

latest is below. Our views may or may not coincide, but I thank them for

their time in volunteering and helping out.]



This IS the economy, stupid...



Over the past three and a half years as I've watched my career get

annihilated, my savings accounts dwindle, waiting for the Great Punkin' as

it were, it finally dawned on me a little over a year ago, this is the

economy, stupid! It has been mildly amusing to fairly sickening to watch the

City of San Jose not unlike other municipalities whine and fuss over a 10%

pay cut while many of us have easily taken a 75% haircut and counting. It

hasn't escaped me either that we are about forty six months into this

financial crisis and we are just now hearing and reading the call for

emergency pay cuts not to mention the budget cuts that have been littering

the headlines of late. Not without notable mention the most recent headline

on June 22, 2011 where the California State Controller Chiang threatened to

withhold California lawmaker's paychecks for not producing a balanced

budget, and without much fanfare unlike times in the past a short time

later, June 28, 2011 (ahem!) the Mercury News reported Governor Brown had a

budget in hand he was sure to approve! Amazing that our "public servants"

can get along so well and settle their differences now that is it their

money that is being withheld.

 Without going through all of the blame and rhetoric that we're all nauseated

hearing one more time, I do believe that if we cannot stimulate the economy,

first through some sort of renewed confidence that isn't spelled QE3, with

said confidence in fact it may lead to new jobs and then the American public

into at least considering buying a home our lifestyles might JUST change as

in a downgrade and maybe change for the foreseeable future and possibly

beyond. My personal opinion, I look for home values to continue to

deteriorate another 10% at the minimum and up to 30% or worse should we

continue in this downward holding pattern we cannot seem to shake.

With Americans continuing to lose equity in their homes, some losing half,

or most of their savings riding out their unemployment situation how can our

lifestyles that we've become so accustomed to stay at status quo when our

resources are tapped leaking like a sieve at unprecedented levels?

Especially since we've been in an uptrend with regard to the American

lifestyles upgrading over the past few decades?

Some things or a lot of things for that matter have got to give.

 It is one thing to complain, so what is the solution? Run to the mirror and

deem yourself accountable, we the American public are responsible for the

politicians we vote into office and allow, yes I said allow to make laws

that are not in our best interests but their own. We as the voting public

need to consider that MAYBE WE AS A NATION CANNOT AFFORD THE PRIVILEGE OF

THESE "PUBIC SERVANTS" SERVICES AND starting immediately elect officials:

 #1. Have to ask the American people IF they can have a raise and not vote

their own raise in, automatic pay increases no less.

 #2. Have the EXACT same retirement program we have, no more lifelong

pensions, are you KIDDING me???

 #3. Have the EXACT same Health Care Program that they prescribe for all

Americans

 #4. Consider increasing our expectations of said politicians and kick out

the candidates with DUI's, Domestic Violence history, accepting any favor

whatsoever, ANY perverted behavior, there is never just one cockroach, ANY

cheating spouse, if you don't have any more self- control than that OR the

nuts to tell your spouse you want out, don't try to run our country or your

municipality clean up your home front First!

 #5. Any and all laws said elected officials enact have the exact same

consequence for themselves as they vote to give to Americans

 I received a call from a former client that had a home paid for in another

state, took money out of that house and paid cash for another, upgraded home

they purchased and now are letting the first house which they took cash

proceeds from go back to the bank. I'm not a huge fan of the banks but that

is just not right, we as Americans HAVE to find it in ourselves to do the

right thing even in the face of watching our corporation owned and operated

government do exactly to us and others the same thing I am describing here

in varying degrees, this HAS to stop somewhere and it starts with us as

individual Americans. My father's generation, he's 74 with all its foibles

did a lot of things right and to this day if you shake my dad's hand,

whatever he shook on he'd rather die than not keep his word. For us to get

back the former reputation, respect and dignity of our once pristine nation

we need to act accordingly and make sure our corporations and government are

in line with OUR values as a nation. Your vote does count, what you say and

do does too, everyone is watching, your kids, family, neighbors, friends

and colleagues!

 Finally, some unintended benefits came from this gut wrenching time and I

can say I'm better for it

 - I appreciate my family more than ever, all of them, even Uncle Art...

 - I appreciate my four year old car and don't understand my previous

obsession with driving a newer one than my new one

- I may not ever be able to buy Diesel brand jeans again, so I love the

one's I have

- I'm still in this business and I thank God for every client, like my

jeans I love the one's I have!


My boyfriend and I were sitting at a table at his high school reunion, and

he kept staring at a drunken woman slugging down her drink as she sat alone

at a nearby table.

I asked him, "Do you know her?"

"Yes", he said, "She's my old girlfriend. I understand she took to drinking right after we

split up those many years ago, and I hear she hasn't been sober since."

"My God!" I said, "Who would think a person could go on celebrating that

long?"


Lisa Melby

Firestone Financial Group

 www.lisamelby.com

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106312193954&s=8721&e=001ZNWqIz

_nv7ROppXtEEYNKV5y3kglD91vAMiOMstGq3smBf-Qh-3hZnGwjyco8THZe-NYg-NzfYJcLj1mGv

H5xCsk8Va-DyI-3SV2da1wYr0e1kIc4hDloQ==]



Editor's note:



Yesterday the press was filled with accounts of the massive, partial, Bank

of America settlement. But companies involved in other potential liabilities

are closely following progress/resolution between other companies.

For example, Ally Financial Inc. said it expects to incur a $100 million
second quarter charge to cover mortgage losses posted by securitization
trusts, and that it received subpoenas from regulators related to "certain
mortgage activities" according to a filing with the SEC. In an updated
prospectus filed with the Securities and Exchange Commission, Ally said it
made payments to such trusts of $152 million in the second quarter.  And returning to Bank of America briefly, it has set aside $14 billion to meet investors' claims that loans packaged in mortgage-backed securities before the financial crisis failed to meet promised underwriting standards. As you might expect, this should eliminate any profits during the 2nd quarter. The $14 B is the $8.5 billion non-agency settlement plus another $5.5 billion in charges to cover additional claims from government-owned mortgage companies as well as other private investors. In addition, BofA said it could eventually face as much as $5 billion in additional claims over its underwriting standards from other banks. So far, Countrywide has accounted for more than $25 billion in losses at BofA - the gift that keeps on giving.

 Freddie Mac has entered into a proposed settlement with whatever is left of Taylor, Bean & Whitaker Mortgage and the creditors' committee appointed in the lender's bankruptcy proceeding. Freddie Mac told the SEC that it will be granted an unsecured claim in the TBW bankruptcy estate in the amount of about $1 billion, which represents its exposure to past and future loan repurchases, but the mortgage financier estimates that it will only see between $40 million and $45 million from that claim - about 4 cents on the dollar! Freddie will also be entitled to approximately $203 million on deposit in certain TBW bank accounts relating to the company's mortgage loans.

The FDIC as receiver of Colonial Bank, which went under in 2009 as a direct result of the fraudulent activity going on at TBW, has already handed over $150 million of this amount to Freddie. In addition, the GSE will receive other mortgage loan receipts estimated to be $6 million, but Freddie must pay a total of $61 million to TBW and the trade creditors represented by the creditor's committee to settle their potential claims against the GSE.



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=1106312193954&s=8721&e=001ZNWqIz_nv7SqsZNCsbm_cOKVKYLZB2pFjmxLG6WWPivbQ85jDrIWqYgzPbNr41fCj4sLOtFmClQK2Bh4Um

2HfDicTje7Clp51dCs8A09JxwUcB3aIx8Zzw==]. The current blog takes a look at near-term news for non-agency securities, such as jumbo residential loans. 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

http://globalhomefinance.com

Market Snapshot June 30th

Provided by Sigma Research

The bond and mortgage markets opened better this morning after the strong selling the last two sessions taking rates up 20 basis points. The Greek debt issue is off the radar for the moment after its parliament voted to cut spending and qualify for assistance from the IMF and EU keeping Greece from defaulting, at least for now. Safety trades in US treasuries being closed and the very weak treasury auctions this week along with the end of QE 2 today---all combined to drive rates higher in a rapid move. Mix in that the ECB will likely increase its base interest rates next week and the tone has changed. Both the 10 yr note and FNMA 4.0 coupon hit and held their respective 200 day averages but broke all other shorter term averages, the momentum oscillators are now in bearish levels. As we continue to point, the bond and mortgage markets are going to remain volatile over the next week or so as investors work through the end of QE 2, Europe's continuing debt issues and the weakening economic outlook. We are not looking for interest rates to increase in a major way but it is unlikely rates will return to the best levels seen three or four days ago.

 Germany's biggest banks and insurers and the government agreed on a draft proposal to roll over Greek debt holdings before a meeting with Finance Minister Wolfgang Schaeuble today, people familiar with the plan said.(Bloomberg)

 Weekly jobless claims at 8:30 were down just 1K to 428K, estimates were for a decline of 8K. Continuing claims declined 12K to 3.72 mil. Weekly claims have now been above 400K for 12 consecutive weeks, no improvement but equally no increases in claims.

 At 9:30 the DJIA opened +47, the 10 yr note +7/32 at 3.10% -2 bp and mortgage prices +5/32 (.15 bp).

 At 9:45 the June Chicago purchasing mgrs index, expected at 53.8 frm 56.6 in May, jumped to 61.1; new orders increased to 61.2 frm 53.5, employment did decline to 58.7 frm 60.8 and prices pd at 70.5 frm 78.6 on a decline in oil prices recently. The report much stronger than thought flipped the bond and mortgage markets from minor price gains to lower prices; mortgage prices at 9:3 up 5/32 (.15 bp) at 9:50 -5/32 (.15 bp), a .30 bp swing lower and breaking the 200 day averages on the 10 yr yield and prices on the FNMA coupon. VOLATILITY!

 Will the Fed launch QE 3 at some point? That is the question being debated in minds of traders now with the economic outlook declining somewhat. Many believe the Fed is out of bullets to help the economy, historically low US interest rates haven't helped much, at least based on where the economy stands now; however what would have been the situation if the Fed hadn't executed QE 2, buying $600B of US treasuries? Bernanke has said it is now a fiscal matter, meaning Congress and the Administration have the ball now; that of course isn't a confidence builder in the minds of investors since Washington continues to play its political games while the country stumbles.

 Today is the end of the month and the end of the quarter, to some extent today trading in equities and bonds may be impacted on moves large investors need to make to adjust their portfolios for the end of the 2nd quarter.

http://globalhomefinance.com

Mortgage Market Snapshot 06-29-2011

Provided By: Sigma Research

At 9:00 this morning al global markets are glued to the events in Athens with the vote on austerity is taking place; in the streets police firing huge amounts of tear gas to break up protesters. The vote has been completed and it passed. Greek citizens will pay a heavy price for its government and its country over-spending for years. As we have noted many times in this column once a positive vote on spending cuts would happen the US bond market would see selling as safety trades are taken off. The US rate markets have moved higher quickly as we noted previously they would likely do once Greece moved back from the cliff. Two days ago France got their banks to re-cast shorter term Greek debt to much longer payout terms, one necessary step along with austerity plans to keep Greece from defaulting. News out of Germany indicates it will also get their banks to follow France's necessary action.



The bond and mortgage markets have turned bearish near term, breaking most bullish technical levels in the last 48 hours. From a technical perspective, as we have mentioned a multitude of time here, both the US equity and bond markets have been at extreme overbought (bonds) and oversold (equities). It was only a matter of time before markets would turn over. It usually takes some event to trigger the swift change in over-extended markets; the Greece vote, the poor bidding on this week's Treasury auctions and comments from Jean Claude Trichet yesterday interpreted to imply the ECB will raise its base lending rates in July have combined to send interest rates higher.



Is this the end of the declining interest rate markets? It is too soon to make that call! Markets have to settle and turn back to basic economic fundamentals and calm down from the current volatility. What we can take away, when the 10 yr note trades below 3.00% it is on thin ice. Investors in US bond markets are increasingly likely to demand a higher rate of return to continue funding the US growing budget deficit as interest rates in Europe and China increase. The outlook for US economic growth also a question mark; the divide between bullish outlook and a less optimistic outlook is wide----both views not well grounded.



Monday and yesterday Treasury auctioned $70B of notes in two auctions; both failed to meet expected demand. Today Treasury will auction $29B of 7 yr notes after rates have increased 20 basis points since the close last Friday, with higher rates will the 7 yr see better demand? If not expect more selling.



Already this morning markets have been very volatile; in the bond and mortgage markets prices have had a wide range. The 10 yr note yield spiked to 3.10% at 9:00, by 9:30 back to 3.06%; mortgage prices at 9:00 -9/32 (.28 bp), at 9:30 -3/32 (.09 bp). The three stock indexes equally volatile into the 9:30 open. Expect more trade volatility through the rest of the day.



Mortgage applications decreased 2.7% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending June 24, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 2.7% on a seasonally adjusted basis from one week earlier. The Refinance Index decreased 2.6% from the previous week. The seasonally adjusted Purchase Index decreased 3.0% from one week earlier. The unadjusted Purchase Index decreased 3.8% compared with the previous week and was 4.5% higher than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 0.7%. The four week moving average is down 1.5% for the seasonally adjusted Purchase Index, while this average is up 1.5% for the Refinance Index. The refinance share of mortgage activity increased to 69.5% of total applications from 69.2% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.8% from 5.9% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.46% from 4.57%, with points increasing to 1.19 from 0.91 (including the origination fee) for 80% loans. This is the lowest 30-year rate recorded in the survey since the middle of November 2010. The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.64% from 3.70%, with points increasing to 1.11 from 1.05 (including the origination fee) for 80% loans. This is the lowest 15-year rate recorded in the survey since the beginning of November 2010.



The DJIA opened +40 at 9:30, the 10 yr note -9/32 at 3.07% +3 bp and mortgage prices -3/32 (.09 bp) frm yesterday's close. Stock indexes have rallied for the past couple of days and interest rates have increased; all about the belief that the Greek bailout would be completed, now that the vote passed it may be a buy-the-rumor-sell the fact trade today in both the stock and bond markets.



The NAR reported May pending home sales at 10:00; expected up 3.5% jumped 8.2% frm April. Yr/yr +13.4%. A better rep[ort than was thought. There was no initial reaction to the report. At 10:00 the DJIA has turned lower.



http:globalhomefinance.com/index.php

June 29: Energy Efficient Mortgages; What might a BofA settlement mean to clients?

Mortgage Indusrty News from Rob Chrisman and Associates:

[I am away from the computer on a daily basis, and my access to e-mail is sporadic and not timely. In my place are daily commentaries from a series of very knowledgeable mortgage industry people with different backgrounds, and they have been given very little direction about what to write about - the latest is below. Our views may or may not coincide, but I thank them for their time in volunteering and helping  out.]

How You Can Make a Difference(and make a lot of money in the process)

 I think it's fairly safe to say that most of the people who jumped into the industry to promote the toxic loan products left a long time ago. For the most part, those who remain in the industry to clean up this mess were not the ones who were promoting the products to start out with. I am sure there are a lot of Loan Officers who feel like I do. We have always put the needs of our clients first and did not give in  to the temptation of the fat commissions that were being offered to promote those products. We can't help but feel that we are being punished for someone else's crimes.

The real irony is that many of the changes that have come about actually make it  harder for those of us who have acted as professionals to serve and protect the borrowers now.

Although most of us remaining in the industry did not cause the problems, we are  in a unique position to solve them. I do feel that the biggest opportunities remain fairly unidentified by most Realtors and Loan Officers though.

No matter who is responsible for the housing meltdown, there is no debate that it has been devastating to the economy and resulted in a lot of suffering. You can't work in this industry without seeing the hardship every day. Clearly there is a need to stabilize the housing market and create employment. We have the ability to do both with products that offer multiple benefits right now. It is truly a case where 1 plus 1 equals much more than 2.

Just about anywhere you go in this country there is a significant inventory of distressed properties. There are also a significant number of skilled people in the construction field that are currently unemployed. These two dynamics have a clear symbiotic connection.

Currently, these houses are bringing down the values in these neighborhoods as they sit empty and neglected. They're also putting a strain on law enforcement and other municipal services at a time when they are already struggling due to the lack of  revenue. When they do sell it is typically to an investor who pays cash for the  property. Obviously, they're buying it at a deep discount, which further reduces housing values and municipal revenues. Typically, these investors either repair them and rent them out, or repair and sell them. In either case they will not generally do more than a token level of work to them. Since the extent of the repairs translates directly into employment and revenue for the community, this is certainly not an  optimal situation. They are also not concerned about including the measures to increase the energy efficiency of a home because they will not be paying the utility bills.

There are even direct correlations between the percentage of rental houses in a neighborhood and things like teen pregnancy, drug abuse, dropout rates and crime.

We have the ability to change this dynamic by increasing ownership.

Now, let's look at what we can create here. We have the products that allow owner occupants to purchase these properties, repair them, and turn them into very nice homes. They can make them very energy efficient as well. This results in much higher levels of repair and upgrade to these properties creating more jobs, higher sales prices, higher tax revenues, and better neighborhoods. As if this is not enough,  cash buyers are not good for my business or yours. I make my living originating  loans.

So how do we accomplish this? Let's talk about the energy efficiency component of this for a moment. Increasing the energy efficiency of these homes involves additional upgrades and job creation. It also makes the home more comfortable, affordable, and dependable for the new owner. In many cases the savings on their monthly utility bill can be substantially greater than the cost that it adds to the mortgage payment.

This means the homeowner is holding onto money they would have been sending to a  utility company every month. This money is remaining in the community, creating  additional jobs and municipal revenue.

I am a huge advocate for the Energy Efficient Mortgage Program (EEM). In fact, it is very likely that I have personally done more EEMs since the program was introduced in 1993 than any other loan officer in the nation. When this program was first introduced I was very excited about it. In all honesty, my excitement was not based in any extremist desire to save the world; it was based on the fact that this was clearly a way to remove a major barrier for many buyers.

Let me explain; when I was talking to qualified buyers whether they were first-time or move-up buyers, they had one thing in common, fear and anxiety. The biggest factor among those who ultimately chose not to buy was fear and anxiety. They were looking at increasing their monthly housing expense. They had to deplete their savings to get into the home and would now be responsible for any major unexpected repairs.

 Their concerns were legitimate.

I recognized the EEM as a great way to protect these buyers and alleviate a lot of their fears. The program required an independent evaluation to determine that  the savings on their energy bill would be greater than the increase to their mortgage payment. This made the house more affordable. Most importantly it addressed the single most common unexpected expense that affects homeowners in my area, the failure of their air-conditioning unit. There is typically no warning of this, and it is  very expensive to replace. Here was a program that allowed them to finance 100%  of the cost to replace that old inefficient air-conditioning unit with a brand-new, state-of-the-art one that was under warranty. Many of these distressed properties have issues that can be addressed using nothing but the EEM. And when properties  need upgrades and repairs that go beyond the EEM there are several solutions we  can offer. The FHA 203K, Streamline 203K, and FNMA Homestyle Renovation loans all provide opportunities for owner occupant buyers to purchase these distressed houses and turn them into very nice homes.

It has taken me almost 20 years of specializing in these programs to learn how to use them effectively. If we are going to have the impact that we need to on this  process we need to greatly reduce that learning curve. I created a platform to assist policymakers, contractors, and those in the real estate community with practical information on how these programs really work. If you are interested in creating  a lot of opportunities for yourself while making a significant contribution to solving the issues your community are currently facing, you are welcome to utilize this resource at ExperiencedEnergyFinancing.com [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106299939917&s=8721&e=001HSPfPI0rxwIfKpJmH-zTDEYf5n4hTgq9YFyL9P9a1qHu_xDa_mBF-fNYr30aFkbBT2ZOMcg_wc-8AUXeZY2IHKegW_DP4ECex4UsUSgm0d_gc0asZfuWJUa2fxTz6DO4D_g7O6Tvjzo=].

I have also been speaking at state and national events to promote the understanding of these opportunities. Some of these presentations may be found on my site as well as a list of upcoming venues. I am currently developing a video series that will  be offered through a blog format that I will be introducing in the next couple of days. Through this I will be offering ongoing tips and training related to these opportunities. If you would like to receive these presentations please email Scott.Short@Comcast.net [mailto:Scott.Short@Comcast.net] and we will ensure that you are added to this distribution list. Although most of the information provided there is relevant nationally, some of it relates to local and state programs as I currently limit my loan origination to California.

Kevin Nunn

Residential Loan Officer specializing in homebuyer programs, energy financing opportunities, and acquisition/rehabilitation financing throughout the state of California since 1993.

Editor's note: Word has hit the tape that Bank of America is near an $8.5 billion settlement with a group of non-agency investors on rep-and-warranty-related issues:

226 deals, of which 15 are re-REMICs. The remaining 211 deals have a current balance outstanding of $79 billion and original balance of $178 billion. As such, the $8.5bn of settlement translates into 10.8% of the current balance and 4.8% of the original balance, but exact details are changing as more comes to light and many questions remain. For example, for non-agency investors, is the issue of whether the settlement payment is made to the investor group directly or to the trusts involved in the complaint - both have pros and cons although most believe that the money will likely flow into the trusts, otherwise BofA would expose itself to a large contingent liability from other investors in these deals. When will the money be dished out to investors?

It is expected that the cash flow will come over several months.

What does this mean for BAC liability and other non-agency deals? Remember that total Countrywide non-agency issuance during 2004-07 (the period during which the deals in the settlement were issued) was $523 billion, so the settlement covers about 35% of this. There is some fear that the remaining 65% of production, although probably cleaner, could be subject to more liability, therefore between $24-30 billion!

Regardless, any positive news, which includes less uncertainty such as some kind  of settlement, may help prices of existing securities.

But will this, or any settlement, be passed down somehow to the originators which sold loans to Countrywide between 2004 and 2007? First, remember that this settlement is for non-agency product. Second, and I am not privy to any inside information,  just because a settlement includes a portion of BofA/Countrywide's production, that doesn't mean that BofA, or any large investor, will "call off the hounds" in pursuing full retribution against originators. The settlement does not resolve issues for smaller lenders, especially when fraud is involved, nor does it mean that BofA (or any investor) would ever say, "Well, we settled for X pennies on the dollar,  so we will let you do the same."

 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=1106299939917&s=8721&e=001HSPfPI0rxwKacKFkPi4Gl7lZh8_WLKXUXKe55GryYxAWy3tyBzZEEHcXDJ7bMRnx-B-JUON6e4Mv-enf_FT1YYTrX5egwv648jtZdZRhYBSab9hatTM6ww==]. The current blog takes a look at near-term news for non-agency securities, such as jumbo residential loans. 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&et=1106299939917&s=8721&e=001HSPfPI0rxwJEw57ukZNH26fdQJ532xf40ujG6Y4aDyMyWtOkjpLRQQrkPJp0myDJ4q0qb9Z3WDhbX53rQSgs0vpNGY_qrwlI-sAzcFDBklo_e3-UHA6w1qLDSSpNNovNq8a3oBfnFq-1cowVXfP-tBEFjMDy5Vq1C5mZAbDuV4BuCA7GF6q17w==]

or www.TheBasisPoint.com/category/daily-basis [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106299939917&s=8721&e=001HSPfPI0rxwLItTqdm7qRqa1sSCIOhM9EOoaSI3JKo4JhA_Mt8qBh0aqMrwaCG5WixUaQEEE08K4AMDtQ4hvjI8CCwdeai7UbMWJVGxBJWnggRJNKVwqcGDwd5a63neKjuKNiS2P0r6twHbdrapiZtQ==].

For archived commentaries, go to www.robchrisman.com [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106299939917&s=8721&e=001HSPfPI0rxwKuK6E3h8mOtuhN-JrqeWTqTFjjZZmQc1g97tryb_a8P7HDiB7PUijuxPpwF7DO5blcbF0__htGailPOmovVWbr5DUdYwUEEJpet7u4obmPsA==].

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 as email

http://ui.constantcontact.com/sa/fwtf.jsp?llr=zy6u9cdab&m=1102827910937&ea=bcahoone@globalhomefinance.com&a=1106299939917

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

Mortgage News June 27, 2011

Mortgage News June 27: Common Sense Meeting Policy in Mortgage Banking; investor & industry updates

‎Today, ‎June ‎27, ‎2011 ‏‎

[I am away from the computer on a daily basis, and my access to e-mail is sporadic and not timely. In my place are daily commentaries from a series of very knowledgeable mortgage industry people with different backgrounds, and they have been given very little direction about what to write about - the latest is below. Our views may or may not coincide, but I thank them for their time in volunteering and helping out.]

Meeting Agenda/Itinerary Guidelines
Though not specific to the mortgage industry, I believe we all have been participants in meetings where the 'leader' of the meeting really didn't have their act together.
As we all know, this is a waste of everyone's time and based on the amount of people in the meeting, can be an extreme waste of monetary resources. I am not purporting to be a wizard of the successful meeting, but I have found some things that I've used that have contributed to successful meeting outcomes. As the leader of a meeting, the more efficient we are in this environment, the more efficient and successful the attendees can be in their job and will contribute to the overall success of the organization.
1. Start on time and end on time. I am a stickler for this and it needs to be said; whether for me or one of my managers when they read this. I feel it is disrespectful of other peoples' time if you say a meeting is going to start and end at a certain time and you start it late. You are disrespecting the people that are there on time. People's schedules are packed. You are jamming up other parts of their schedule for your selfishness.

2. Have an agenda/expect an agenda. What I mean is that the meeting should have specific and expected outcomes and deliverables. You are going to accomplish very specific things and the attendees are going to leave with deliverables. In addition, the meeting agenda should be distributed prior to the meeting with enough time given to the attendees so they can prepare. They will then come to the meeting with their 'agenda' that will contribute to the meetings accomplishments and deliverables.
a. If this is a regular meeting, like a weekly staff meeting, an agenda may not be appropriate. But, as the leader, you will have agenda items to discuss. Once you've conducted a few staff meetings in a row, your staff will understand the process and what is expected of them. The business/department leaders in attendance will be expected to have specific items/issues that they need to discuss; specifics like: issues/bumps in the process that requires a resolution, kudos/compliments for jobs well done in the past week, what's going well and what isn't.

3. The agenda that is distributed prior to the meeting should state the desired outcome. If you are the leader of the meeting, you should re-state the desired outcome when the meeting starts. This keeps the meeting and its participants on task. It will also contribute to item 1 in our list and that is to end on time!

4. Keep minutes or a log of the meeting. This will provide a list of the people who leave the meeting with deliverables so you, as the leader, can follow up with those individuals to check on their progress. In addition, if there are decisions made about operational issues or procedures, you are documenting the changes.

5. Some people like to talk, some people don't. As the leader of the meeting, when someone begins a soliloquy, it is your responsibility to reel that person in and keep the meeting on point. In addition, all of the attendees are there for a reason. They are there to contribute to the outcome/s. If a person is there that doesn't like to talk in this type of a forum, it is your responsibility to draw them out and draw on their expertise/opinion.

6. Meetings can and will feel like 'work'. Whether you have a gift for levity or just highlighting a recent success within the department/company, provide your attendees with the opportunity to laugh or smile. It goes a long way to helping them feel positive about the process and will contribute to the productivity within the meeting environment.

As the leader, it is your responsibility to make the meeting work. Everyone is different and will run the meeting in a different way. There will be times where, as the leader, you'll need to take a step back and evaluate whether there might be adjustments needed to increase the value of the meeting to all of its participants. Hopefully, this will provide some guidelines not yet thought about or just a good reminder.
(Attributions/Contributions: Michael Hyatt - Thomas Nelson Publishers, Raymond Gleason
- Building Champions)
Brad Nease
COO/Capital Markets, Correspondent Lending
Icon Residential
mailto:bnease@iconresidential.com [mailto:bnease@iconresidential.com]
Editor's note:
Fun facts? As Greece goes to privatize some of its sovereign real estate holdings in order to raise capital, it finds itself the only country in Europe without a centralized registry of deeds. About 40% of properties are currently in dispute and lack clear title. Why does this sound vaguely familiar? And it is believed that ancient Rome was the only city in history to go from a population of more than 1 million to a population of less than 1 million. That is, up until Detroit did it recently.
Susquehanna Bancshares ($14B, PA) will buy Tower Bancorp ($2.6B, PA) for 1.5x tangible book (in stock & cash). In a related, but unrelated, topic, Mountain Heritage Bank, Clayton, Georgia, was closed on Friday by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, which in turn entered into a purchase and assumption agreement with First American Bank and Trust Company, Athens, Georgia, to assume all of its deposits.
A story in the NY Times focused on the plight in Britain, "For Many in Britain, Being a Homeowner Is a Fading Dream" - "With tighter banking lending and higher rents, first-time buyers in Britain are finding it much harder to save money and purchase a home." I wonder if English papers are saying the identical thing about ownership here in the States? http://www.nytimes.com/2011/06/24/business/global/24rent.html?emc=tnt&tntemail1=y
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205554209&s=8721&e=001e4U4Pg8JjA2qKZXeBSdX3nqLUsknRAHFXfyzbjUqL-bnOZ5jhntRjhZlHjVw-Z3XtAsaMp1WsiXQRXzFVQ7W9pgJyP7kuMvGZX_AP-zuSxneFZKn3NNNsoCMAjp_tXNXgxv2V1l7c03URReTzn5xjwOi0wMGTp3YhNC0aMOmFvVoY5u7DtqkOuBvcZCvo68TMX6H4lAZckMblhpQH4N6fQ==]
How is your profitability? The MBA came out with its measures, showing a drop in profit per loan, industry-wide. If you bucked the trend, good for you. The source of the report can be found at http://www.mortgagebankers.org/ResearchandForecasts/ProductsandSurveys/PerformanceReport.htm
[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205554209&s=8721&e=001e4U4Pg8JjA2HhwcuUHxI_PmPj1EXYtev_-R8pJpIxV2bUqX_6X_hVvwd7GI9nmtC9XF85B_Oh_jpU4KWpm4zo-hrixd4amwmCzVlHkvwz_qyeEt_Mk9wrMVtC1N5584BKTiM3aHsW5MYyuQbZDvkAAAoBYqBK_pTtYYo3HCEYaNnDcL6_606NZshgbBj_3NYXrScuz2WbTzb7PI20z9LMA==].
For economic news this week, it is kind of an average week. We start off Monday with Personal Income & Consumption, on Tuesday we have the usually-depressing Case Shiller 20-city housing price index along with Consumer Confidence, Wednesday we have Pending Home Sales, and on Thursday Jobless Claims & the Chicago PMI. Should any of them move interest rates more than what is happening with the debt structure of entire countries?
Lenders such as Guild and Mountain West got the word out to clients that, for approved CalHFA lenders, for all new reservations on or after June 30, 2011 CalHFA has raised its minimum representative credit score requirement from 620 to 640 for all qualifying borrowers on the CalHFA FHA Loan Program. Additional borrower(s) or co-borrower(s) with no credit score may be eligible as long as the borrowers with credit scores meet the 640 minimum representative credit score requirement. An approved/eligible finding obtained through DU utilizing the FHA TOTAL Scorecard is also required.
For its brokers Genworth Financial Home Equity Access, Inc. rolled out its Closed Loan Program, which "gives reverse mortgage brokers the ability to increase their participation in the loan process without the expense of becoming a full correspondent.
CLP participants act as Sellers (with GFHEA as the Purchaser) in the transaction.
As Sellers, participants will continue their existing broker responsibilities while adding the responsibility for closing and funding their own loans. GFHEA will continue to underwrite, draw loan documents (in the Seller's name) and submit the loans for FHA insurance."
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=1106205554209&s=8721&e=001e4U4Pg8JjA3HjaMKWtsQfDz3v1__2WtMgWvubm6eQMCZieRy4_M4iVRaN5ykcXYQY7_VsHxsf0AYvhrdXLjJJK1ndLfVA6Tl0pmUvd0ElpAUJsNqUtttFA==]
. The current blog takes a look at near-term news for non-agency securities, such as jumbo residential loans. 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&et=1106205554209&s=8721&e=001e4U4Pg8JjA3n3BQc7kt6qk7aOKeBqzfeksNu0G0Hmttg4ngxurlZsKIDUpqoI5-_baVX06M6dmwGuEaP_-A8P2fWu-0T9l2QlKJYdGIW_4BXITW7xzD_q4fpXd48gX-VUhvfQfo-YJ3JQyVVagSicTmBaX65YD1z3KqL0KZMOGQQp8WV0cqEcw==]
or www.TheBasisPoint.com/category/daily-basis [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205554209&s=8721&e=001e4U4Pg8JjA1k283PohEI9_GTmkyJgF0faC3ao8FK3pbVWNGUPt-YuGojteNfKVmOvbnFu50kziG80Nkgku2NK3IM3lOFO6negZNq-xndO94Q84_j_3F3Ig0Locl4_6_xPpcVAnt4GcIRb8aXsoRgnw==].
For archived commentaries, go to www.robchrisman.com [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205554209&s=8721&e=001e4U4Pg8JjA0mJ6Ryc0O3Lp4NRxb_x2OilmR5QV3CoNEkV8Pe-Vb3PukKwVKzOkd9KtSUzOxUvFsfzLUStU_zn-UOQnXienWmmqtbnOihwHVStPdCfHu6Aw==].
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=bcahoone@globalhomefinance.com&a=1106205554209
Chrisman Inc. | 24-G West Main Street #386 | Clinton | CT | 06413

Market Snapshot 06-27-2011 by Sigma Research

Treasuries and mortgages opened a little soft early this morning but by 9:00 mortgage prices crawled higher by .06 bp. The main event this week continues to be the Greece situation with the threat of defaults of its debt that if it occurred it may spread to other troubled EU countries. Economic data also has been in play with manufacturing sliding on the NY Fed index and the Philly Fed business index while the housing markets still in depression showed a little improvement in May starts and permits. 

The Greek debt saga continues but overnight some apparent progress to getting Greece more money to keep it from defaulting. European finance chiefs are set to clear the way for a pending aid payment to Greece after Germany signaled a retreat on its demand to extend Greek debt maturities, a German deputy finance minister said. An emergency meeting in Luxembourg June 19 will probably “find an agreement that the IMF and the Europeans can pay out the next tranche to Greece, given that the key ingredients of the next program are known,” Germany’s Joerg Asmussen said in a Bloomberg Television interview today. “There is a regular euro zone finance ministers’ meeting on the 11th of July and I think there the program should be finalized.” Pressure on euro-area governments to craft a rescue plan intensified this week after Standard & Poor’s slapped Greece with the world’s lowest credit rating. Moody’s placed the ratings of BNP Paribas (BNP), France’s biggest bank, and local rivals Societe Generale (GLE) SA and Credit Agricole under reviews that will focus on their holdings of Greek public and private debt.

This week volatility in treasuries has been high while in the mortgage area prices on the week have not changed. It has been mostly the debt concerns out of Europe and concerns they would lead to a tsunami of defaults on sovereign debt in Greece and then Spain, Ireland and Portugal. In the end like here in the US, at the 11th hour there will be a deal that will stave off any defaults. Here it will be an 11th hour deal to increase the debt ceiling that supposedly must be done by August 2nd. Both Europe's debt mess and the US exploding deficits will continue to dominate financial markets but any true crisis will be averted however the issues will not go away.

At 9:30 the DJIA opened +56, the 10 yr -8/32 at 2.95% +2 bp and mortgage prices +1/32 (.03 bp).

There is good news for the consumer coming from the oil markets, crude oil has fallen substantially this week. Crude declined $6.00 this week so far and likely will fall another $3.00 ext week to test the critical $90.00 level (at 9:30 $93.55). Gasoline prices falling quickly that will lead to better consumer spending if prices remain low. 

At 9:55 this morning the mid-month U. of Michigan consumer sentiment index expected at 74.5 unchanged from the end of May; as reported it fell to 71.8 frm 74.3. The current conditions component 79.6 frm 81.9 and the expectations component at 66.8 frm 69.5.

At 10:00 the final data this week; May leading economic indicators, expected up 0.2% (early this week the outlook was an increase of 0.4%); jumped 0.8% after declining 0.4% in April the first decline in nine months. The better read added some to the equity markets and pushed bond and mortgage prices down fractionally.

Technicals still bullish on the bond market and bearish on equities, however both markets need some consolidation and retracements to keep the trends in tact. Fundamentally, as long as the bond market believes Greece will dodge the bullet and energy prices continue to fall interest rates may be close to their lowest levels for now. The equity markets still face strong headwinds as the economy falters here. Look for continued high levels of volatility in both stocks and bonds next week. 

June 24: Hedge Costs - view from the trenches; Wells Fargo updates

Today's Mortgage News

[I am on vacation, and my access to e-mail is sporadic and not timely. In my place are daily commentaries from a series of very knowledgeable mortgage industry people with different backgrounds, and they have been given very little direction about  what to write about. The third is below. Our views may or may not coincide, but  I thank them for their time in volunteering and helping out.]

Hedge Capacity Utilization

Given the fact that current mortgage pipelines are not exactly large, one may not think that tracking trading capacity or the lack thereof would be a concern given production levels. However, it is precisely in times when lower than average volume levels are the norm that consideration for the topic should be addressed. Last summer many mortgage banker's pipelines were bursting at the seams with more production  than could be hedged using mortgage backed securities traded to securities dealers.

Many were forced then to sell locked production on a mandatory basis for future delivery and some even ran out of that capacity. Others increased profit margins  significantly to slow down volume or executed both strategies. The time to tackle the issue is before it becomes a problem.

The first ratio to consider is the TBA Ratio: current TBA Sales (with all

dealers) / Total Nominal Trading line with all dealers (Nominal due to the fact that many  lines are curtailed do to mark-to-market considerations). If you have $135 million sold forward through mortgage backed securities- TBA and a total line of $180 million your ratio is 75% capacity (135/180.) The next number to consider is the open direct trade or mandatory line percentage ratio (Mandatory Ratio or  MR) defined as the  total amount of loans sold to conduits or investors that have not yet settled divided by the total amount of trading line provided by all investors/conduits. So if you have $75 mil. of loans sold single loan mandatory or thru direct trade and the total lines available in this manner is $100 mil. the ratio would be also 75%. The overall hedge capacity ratio would therefore also come out to be 75% by adding the two amounts

sold: ($135+$75=$210) and dividing by the amount that could be sold:

($180+$100=$280) or 210/280 = 75%. This situation would allow for an additional sold volume of $70 million.

While many mortgage bankers will rely on the MR in times of over capacity (thinking that the amount is unlimited - our experience is that these lines are not unlimited.

Furthermore, once a loan is sold on a mandatory basis, the loans must be delivered or paired off. However, only negative pair-offs are usually allowed, so when the  market sells off and you need to pair-off a mandatory trade you will not get the benefit of the hedge like you would with a TBA trade.

After calculating what your current Hedge Capacity Ratio is, one should consider  that volumes could increase unexpectedly and/or Fallout ratios in the pipeline could decrease given a significant market move with higher rates. For example, if your pipeline increased 50% and you are assuming a 70% closing ratio, could you cover the additional amount of business on a hedged basis? Assuming that a 50% increase in pipeline required new sales of mortgage backed securities of $45 million the new business could be hedged with existing trading capacity. However, if shortly  after such a pipeline expansion occurred, a dramatic rise in rates occurred thus driving up your expected closing rate from 70% to near your company's historical  reject rate of 10% or 90% closing rate; what additional capacity would be required?

First, if the original amount available was $70 million from the example less the pipeline surge coverage amount of $45 mil. = $25 mil would be left leftover. However, the increased pipeline closing rate would require an additional $38 million exceeding capacity by $17 million. During such a time your securities dealers and investors more than likely would not allow you to exceed your lines and therefore your company would either have to make customers wait in line to get a lock until hedge capacity is available or go long and risk that the prices you will eventually get for the  amount long doesn't exceed you profit margins. Either way not a good position.

This also assumes that your mandatory/direct trade lines clear as normal, i.e., that investors purchase loans on the agreed upon time schedule.

However, during expanding production markets we have noticed that the investors/conduits increase the amount of time it takes to purchase loans thereby increasing the amount of line outstanding.

We think that by monitoring the Hedge Capacity Ratio, pipeline production trends, and keeping enough capacity available to handle potential pipeline growth and increased closing ratio events, you will be better served than waking up one morning to find out that you can't cover the exposure locked the previous afternoon. The solution is to monitor your capacity and constantly look for ways to increase it.

Skin in the Game

There has been much talk and wrangling over the potential changes to the securitization market over the Financial Reform Act's provisions for retaining a 5% position on  each non-conforming loan and changes to servicing compensation.  Most of the time simple solutions are the best solutions. Hence, perhaps regulators and FASB should reconsider the capitalization rules for mortgage servicing rights on both purchased and originated MSRs. Yes, mortgage servicing rights have value, however the value should not be recognized upfront before the actual amount of income and expense have been received. Furthermore, mortgage servicing right are not just an IO strip that can be traded like an MBS, they are much less liquid and bear responsibility both to investors and borrowers.

Currently, either type of MSR must be capitalized leaving those with thin equity  levels on their balance sheets the necessity to sell servicing in order to maintain liquidity and/or profitability and/or raise capital. Also, the FASB rules have had an additional side effect: more loans have been originated and approved by underwriters simply because they followed the investor's guidelines versus making "good" loans.

In the old days before mortgage servicing rights were capitalized and most mortgage banks retained servicing, underwriters followed guidelines, but were free to not  approve a loan that they thought was not a good investment. Owners and underwriters knew that loans that went bad had a future detrimental impact on the company's bottom line through default processing and foreclosure costs not to mention reduced cash available due to increasing advances. As the market has evolved due to the impact of the capitalization rules changes and the housing market crises, underwriters now make sure that they follow rules to the "T", but have relinquished some or all of the responsibility to the investor since they followed the "rules"

and sold the loans servicing released. This does not mean that they necessarily make worse loans

- but it does mean that they have not made an investment decision - that is made  by the investor. The best decisions are made by those closest to the transaction

- those who make the loans.

By going back to the "Old Rules" of not capitalizing mortgage servicing rights several benefits would accrue: lenders would have skin in the game, real value would be generated in the mortgage banking business thereby strengthening the industry, the concentration or market share of the largest lenders would be reduced increasing  competitiveness (economies of scale are not infinite),  and better loans would be originated by enhancing the role of each company's underwriters not to mention the accounting, hedging, and other headaches that can be attributed to the process to estimating the value of something that may or may not payoff early or go into  default.

Simplicity sometimes has its benefits....

Dean A. Brown

CEO

Mortgage Capital Management

Dbrown@mortcap.com [mailto:Dbrown@mortcap.com]

Wells Fargo's correspondent clients received a 14-page Newsflash on, "New Condominium Documentation Vendor Available for Prior Approval Loans, New eDelivery Vendor Added; Exhibit 22 Revised, Conventional Appraisal Policy Updates, FHFA's Uniform Mortgage Data Program Updates, Standard Price Policy for Agency Real Estate Owned (REO)."

 Across the hall, on another floor, in another building, in another town and another state, Wells Fargo Wells Fargo Wholesale Lending in recent weeks has sent out updates on Utah's recording fees increasing,  "Streamline the Loan Process and Order Tax  Transcripts via Rapid Reporting, how New York Purchase Transactions May Not be Originated With CEMA, Compensation and

Anti-Steering: Home Equity Compensation Reminders and Clarification, Compensation and Anti-Steering: Update - Appraisal Fee Reimbursement, how the Benefit to Borrower Changes were effective May 21, how Title-related Information Consolidated in Broker Guide, Enhancements to Fannie Mae DU Refi

PlusTM: Resolving Social Security Number Discrepancies and Required Rental Income Documents, how Secondary Financing Now Allowed on Co-op Transactions in the High Balance Conforming Loan Program, Non-conforming Policy Changes for Loan Amounts up to $750,000 or $1.5 million (Depending on State) topics, FHA Financing Allowed for New Construction and Proposed Condominiums in a Flood Zone - effective last month, an update on Government Appraisals (a reminder that Appraisal fees for Government loans should not be collected from the borrower until the borrower receives the initial disclosures.), New Streamlined Sign-up Process Makes Ordering Tax Transcripts Even Easier, Non-conforming Policy Changes for Loan Amounts up to $750,000 or $1.5 million (Depending on State), Enhancements to Fannie Mae DU Refi PlusTM - Resolving Social Security Number Discrepancies, Home

Equity: Value Differences Between Multiple Valuation Products, a New Mortgage Broker Fee Disclosure for Home Equity Lines of Credit, information on Illinois Civil Union, and the introduction of a new net funding process (Wells Fargo Wholesale Lending  is simplifying the process the processing and payoff of Wells Fargo Home Mortgage

(WFHM) to WFHM transactions. This new net funding process will allow us to net and directly apply the funds to pay off the first mortgage.)"

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=1106205306796&s=8721&e=001HPlvkJ

0Ya8qF3qYITGmyi07dvD90wYhzKMGgBcyJPLGolJA2KfX2qvBhs43z-mSygdya56-oMMJV3BUENH

W6mJZI6BoA2mQKJJRae851wAvtU26wGGuwqw==]

. The current blog takes a look at near-term news for non-agency securities, such as jumbo residential loans. 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&et=1106205306796&s=8721&e=001HPlvkJ

0Ya8rvgC22pcLb8jD9l9R0BoHdyv1sRCZPD1-nrkDzWB6wvlD91D7rkvhuqLOKeNclvRiXFix_te

A_TZFqHWNi1bY5_D9ERUT5t3tWQdh401BQgCXSFOkTCJKziW_A2TW5jzZjuJ4eIAXgpaUbh0betr

8El7GHk-U1Kyti1GXFIsE47w==]

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

[http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205306796&s=8721&e=001HPlvkJ

0Ya8p2JWr3Lu6lN9oqm_WA_RQLI8_tn7j-_ogLf-qsE_q-S68H27RqlG2oByTK1nrXe9SOwf_iM2

Q0vK7AZjkPoJXEzpvuYhJOMw_n5Oc2dCDHSHk1yhqqhnT_bATD0__9xTUXn1lbDoxUYQ==].

For archived commentaries, go to www.robchrisman.com [http://r20.rs6.net/tn.jsp?llr=zy6u9cdab&et=1106205306796&s=8721&e=001HPlvkJ

0Ya8rTf-WqhSZgtXGZVzvriy8teq09R3PnmSvBVWckm9s81XD37HOZORqGq5TnXA8d8cb8cYdRkp

gm8PSvltOtwJR6hV_VhtOxAlblfoqaul0xzQ==].

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=1106205306796

Privacy Policy:

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

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

Market Snapshot 06-24-2011

from Sigma Research

Treasuries and mortgages a little weaker in early activity but still holding most of the gains of yesterday. The stock indexes in pre-market activity pointing to a little better open at 9:30.

At 8:30 May durable goods orders were better than thought, up 1.9% and ex transportation up 0.6%. April durables were revised better, overall from -3.6% to -2.7% and ex transportation from -1.6% to -0.4%. Q1 GDP final report improved from +1.8% in the preliminary report last month to +1.9%. It is old news and the fractional increase is relatively meaningless to traders.

Most of the talk this morning is still over the IEA and Obama Administrations decision to take oil from the strategic reserve to supposedly drive down the price of oil thus gasoline. Both oil and Gasoline had already fallen in the past two weeks, gasoline down about 20% from recent highs and crude oil down about $10.00 frm recent highs. Was it just a political move by Obama, or was it necessary? I'll leave the answer to those that are more familiar with the details in the global oil markets. 60 mil barrels accounts from anywhere between 16 hours and 8 hours of oil usage globally, we hear both stats being bantered around. Politically Republicans saying tapping the reserve at this point was unnecessary and set a bad precedent; Democrats saying it is necessary for improving economic recovery. The other view being talked about, showing OPEC they can't get away with not increasing output as it did a week ago.

 As far as helping economic recovery with 60 mil more oil over the next 30 days seems a little too optimistic. The world will get 2 mil barrels a day for 30 days, then what? If the global economy were to immediately re-start growth the price of oil and gasoline will climb right back up. The only way to get oil lower and keep it low is for oil producers to open the taps and increase output dramatically and that isn't on the table now, and likely will never be there.

Yesterday afternoon reports hit that the EU and IMF had agreed on a bail-out package for Greece; the news hit at 3:00 with the DJIA down 180 points, at the end of the session an hour later the DJIA closed down 59 points. The news was welcome but at the moment there still is no lock on the plan. Greece’s next hurdle is to shepherd 78 billion euros ($111B) of austerity measures through parliament, after yesterday’s endorsement of the program by from the European Commission, the European Central Bank and the International Monetary Fund. “We have agreed that there will be a new program for Greece,” German Chancellor Angela Merkel told reporters at an EU summit in Brussels today. “This is an important decision that says once again we will do everything to stabilize the euro overall.”

In Washington, the land of Oz, the work on the budget and debt increase continues. Work of course is a relative term, in this case the work is about who gets re-elected. That is what we have in Washington, people sent there to work on their re-election campaigns. Stupid is as stupid does according to Forrest Gump, he must have spent time in the city. Republicans walked away from discussions yesterday, a show of adolescent behavior; Democrats equally childish, unwilling to accept cuts in most programs unless they get tax increases. The saga will go on and on until the final hour on August 1st, then it will not be a meaningful measure as our leadership continues to kick the can down the road as they have done for the last three years with no budget. Let the next Congress deal with it, I want to be re-elected and get my pension, health care and all the perks I can get! I couldn't care any less about what has to be done, its al;l about me!

At 9:30 the DJIA opened down 19 points after trading higher in pre-market activity. The 10 yr note moved back to unchanged after being down 8/32 at 9:00. Mortgage prices at 9:00 were down 5/32 (.15 bp), at 9:30 off 3/32 (.09 bp). The 10 yr note holding at and unable to break below 2.90% but may make it as long as the equity markets are under pressure as the economic outlook weakens.

globalhomefinance.com