We received updates on more changes yesterday. (Sometimes I feel that I should be wearing a dark hood and carry sickle over my shoulder!) It appears that once again investors are either eliminating programs or are pricing them such that new locks are non-existent. As one investor put it, “I don’t want to try to catch falling daggers. I’d rather be picking them up, but we’re not there yet.” A partial list from yesterday:

Greenpoint continues to offer their Alt-A Fixed and ARM programs, conforming balance Alt-A program (their most popular), non-conforming, although their expanded Alt-A has been temporarily discontinued. They, like practically everyone else, has shrunk the credit box on  programs,  especially in the lower doc types which now require higher FICO scores, lower LTV's, more IO restrictions, etc.  They’ve eliminated their HELOC program.

WAMU changed their stated income criteria so as to only be allowed for self-employed income.

Countrywide changed their reduced, no ratio, SISA, NINA, and “Super Streamline Documentation” programs, hitting their piggyback and standalone second-lien transactions (90.01-100% CLTVs are no longer eligible for purchase, single-lien transactions with 90.01-95% LTVs that have MI are still eligible.)

Nat City Correspondent suspended their OTC/Mod Program, which is/was their Construction loan program. Its wholesale home equity unit has stopped taking applications for loans and lines of credit. In a move similar to Wells Fargo focusing on its retail channel, National City is still accepting applications for such loans at its bank branches.

CitiMortgage’s Expanded product (subprime) program dramatically increased their add-ons for stated, bank statements, investment property and second homes. The bank statements add will be +.70% to rate, and stated add will be +.75% to rate, for example.

Luminent is/was a portfolio REIT with about $9 billion in assets who had announced a week ago that their dividend was secure and that they had ample liquidity. Yesterday they announced today that the dividend is suspended and that they are delaying the filing of financials.

Aegis Wholesale has stopped accepting new applications and has suspended funding loans in their pipeline “because of extreme changes in the markets and rapid decline in conditions in the secondary mortgage and national real estate markets, Aegis has been forced to suspend taking applications for new mortgage loans from its broker customers and has ceased the funding process for loans in our pipeline.”

Fieldstone Mortgage has ceased funding residential loans and taking new applications in the wake of margin calls at its parent company, C-BASS.

NovaStar is suspending funding of some mortgage loans due to "severe dislocation in the secondary market," according to a bulletin the lender sent mortgage brokers Friday. "This is not a long-term decision or change in strategy, only a temporary response to dislocation in the secondary market," a NovaStar spokesperson reported.

With what is happening in the mortgage business, “experience is the thing you have left when everything else is gone.” Tell that to Warren Spector, after Bear Stearns ousted the co-president due to credit-market losses and eroding investor confidence. Spector was responsible for fixed income and asset management. Bear has lost 33% percent of its stock market value this year, and Standard & Poor's said Bear Stearns's debt ranking may be cut because of declining earnings from losses in bonds backed by residential mortgages.

What is the Fed going to do today? One analyst said, “"I think there is almost zero chance of fed cutting…it will take them at least until the September meeting to absorb what's going on and if liquidity absolutely dries up they will be forced to act…any cuts that come will also come in 25 basis point increments since the fed will want to gradually inject liquidity…” Another said, “The markets need some comforting words by the Fed to perhaps calm this panic stricken community. Credit tightened to the public (obviously long overdue) and then credit tightened across the board. A tidal wave of panic has now spanned the globe. Credit has essentially seized-up and we are left holding the proverbial bag and it will take a few more years to work its way out of the system.” And lastly, “We expect the Fed to keep their inflation bias intact for three reasons: inflation remains a problem, removing the phrase could prove counterproductive - it could cause long-term Treasury yields to rise, and Fed Governor Kroszner stated that ‘at this stage the economic fundamentals are really unchanged from...two weeks ago.’"

A guy complains of a headache.

Another guy says, "Do what I do.  I put my head on my wife's pillow, she rubs my head, and the headache goes away." 

The next day, the man says, "Did you do what I told you to?"

"Yes, I sure did.  By the way, you have a nice house!"