Henny Youngman used to say about marriage, “If you come home to a person that gives you a little love, understanding and tenderness, it usually means you are in the wrong house.” Speaking of the wrong house, some believe that lending on houses may continue its trend away from brokers and third party originations and into retail operations. Large banks, it appears, continue to focus on lending in their own branches. Large numbers of wholesale reps from defunct companies (or those that are on life support) are thinking about working in branches for banks, becoming private mortgage bankers, or loan agents sitting in the local bank branch. Like things were 40 years ago…

Many originators want to be able to click on a free site and see what the 10-yr Treasury note is yielding, or how a current mortgage-backed security is behaving. This might be of great value: http://www.briefing.com/Investor/Public/MarketSnapshot/BondMarketUpdate.htm

• Diablo Funding (San Francisco area) announced yesterday that they will be closing on Tuesday, due in part to buybacks and heavy office lease obligations. There are rumors that Indymac is purchasing them, but that is unfounded – instead Indymac is absorbing the bulk of their loan agents. (Diablo’s agents were 1099’d contractors, whereas I have heard that Indymac’s agents are all W-2.)
• According to DataQuick, a total of 5,014 new and resale homes and condos were sold last month in nine San Francisco Bay area counties, -40% from the same period a year ago, and were down 31% from August.
• GMAC cut 3,000 jobs (25% of their worldwide workforce) in its mortgage unit, Residential Capital (ResCap).
• Countrywide’s plan to cut 20% of its workforce, announced in early September, will force the company to take a pretax charge of $150 million. Speaking of Countrywide, the SEC is investigating Angelo Mozilo’s "10b5-1" plan, a plan designed to allow senior executives to sell shares at regular intervals automatically. If executives pledge they don't have insider information at the time the plans are established, they can be used as a defense against insider-trading charges. Some believe that executives (insiders) were setting them up just ahead of big stock drops. Mr. Mozilo sold $130.6 million in company stock in the first half of the year through executive sales plans, up from $60.4 million in the year-earlier half, according to securities filings.

Mortgage prices are good out there, and the 10-yr is down to 4.48%! With oil being at $90/barrel, Wachovia being the latest bank to announce disappointing earnings, the current trend in thought is focused on an economic slow down. A big fly in the ointment, however, is that the dollar is continuing to decline. The dollar sentiment is negative, and if the Fed lowers rates, the dollar may sink even lower. One Wall Street firm mentioned hearing talk of currency market intervention to stop the dollar's fall, which requires coordinated central bank buying of the dollar to overwhelm sellers but it has not been very successful in the past.