It doesn't hurt to take a hard
look at yourself from time to
time, and this should help get you started:
During a visit to the mental
asylum, a visitor asked the
Director what the criterion was which defined
whether or not a patient should
be institutionalized.
"Well," said the Director, "we
fill up a
bathtub, and then we offer a teaspoon, a teacup and
a bucket to the patient and
ask him or her to empty the bathtub."
"Oh, I understand," said the
visitor. "A
normal person would use the bucket because it's
bigger than the spoon or the
teacup."
"No." said the Director, "A
normal person
would pull the plug. Do you want a bed near the
window?"
Bear Stearns changed
their product offerings on
Friday. They suspended “No Ratio”, NIVA, and “No
Doc”, all
second home and investment loans, and their “No MI”
programs.
Citi (at the
risk of possibly repeating
myself) is discontinuing the following programs: for
Prime Lending, NIVA &
NINA for Non-Agency Alt A, “Home on Time” (I guess
they’re
going to be late…), and CRA Stated Income. Under the
Expanded Lending
(Non-Prime), they’ve discontinued Expanded Lending
First Lien Stated
Income Documentation Process and Expanded Lending
Second Lien Programs.
Countrywide made
several guideline changes,
effective today. For their HELOC’s they reduced the
CLTV’s and loan
amounts, and increased minimum credit scores. Along
the same lines, for their
Fast & Easy, Non-conforming, Expanded, and Alt-A
programs, changes included
reductions in LTV and CLTV, and increases in credit
scores.
Nat City Correspondent Lending has
suspended all new registrations and locks under both
the Standard and Select
Extended Capped Rate programs until further notice.
RFC’s warehouse bank is
rumored to be
making changes to their advance rates on 2nd liens
and pay option loans to
investors besides GMAC/RFC, lowering them to as low
as 50%.
On Friday, Impac Mortgage
pre-announced a loss of
$152.5 million, and that filing of its 2Q07 10-Q has
been delayed as a result
of “recent volatility and disruptions in the
mortgage and secondary
markets and integration and analysis of the
financial information from its May
2007 acquisition of certain assets and liabilities”.
On Friday, the liquidity crunch
intensified with the 1-week
LIBOR reaching levels as high as 6.0%. The European
Central Bank made a second
loan to banks to alleviate a money shortage sparked
by concerns over
investments in U.S.
mortgages. The ECB injected another $83 billion, and
the Fed added
$38 billion, the most since September 2001. The
Federal Reserve added
$19, $16, and $3 billion in temporary funds to the
banking system through the
purchase of mortgage-backed securities to help
meet demand for cash amid a rout
in bonds backed by home loans to riskier
borrowers. It added this money through
the purchase of securities, including
mortgage-backed debt to meet the demand
for cash. The New York Fed's additions lowered
the Federal funds rate to
5.375%, after it began trading at 6%, the highest
opening rate since January
2001. The Fed's benchmark overnight rate is
currently 5.25%. Fed funds traded
above the central bank's target for a second
straight day. Speculation
continues that the Fed will ease rates; the market
is
now discounting almost a 100% chance of a 25 basis
point cut to 5% at
the next FOMC meeting on Sept. 18.
It's important to keep in mind
the Fed is providing
liquidity on Agency (GNMA, FNMA, FGLMC) MBS
collateral, not on the non-Agency
subprime, whole loan, Alt-A product.
Funding non-Agency
securities will still be a problem, and all lenders
across the economy are
pulling back, saying “no”, raising haircuts and
rates. OFHEO just
issued a statement rejecting raising the portfolio
cap as of now. They say that
they closely monitor the mortgage market and will
keep the portfolio issue
under active consideration.
This
Week's Calendar
Click
on
a "Release" for Insight
