A guy goes to a psychiatrist. "Doc, I keep having these alternating recurring dreams. First I'm a teepee; then I'm a wigwam; then I'm a teepee; then I'm a wigwam.  It is driving me crazy. What's wrong with me?"
The doctor replies: "It's very simple. You're two tents."

While on vacation earlier this week, I was minding my own business on the stationary bike (in the hotel gym) when the man next to me struck up a conversation about the Iowa caucus. It turned out that it was John Barrasso, Wyoming’s Senator. (No, there was no foot-tapping – that is Idaho!) Over the next 45 minutes I had a chance to ask him quite a wide variety of questions (from “What is Robert Byrd like” to “How is it flying into Baghdad?”) including “What’s the scoop on the FHA bill?” He replied that since Congress doesn’t even return until January 22nd, he saw nothing happening with FHA limits until late January at the very earliest, more likely next month.

Rates are low, and probably heading lower. This morning’s unemployment data was weak, and many who thought that the economy was doing well were hanging their hats on a strong labor market. No more! Non-Farm Payroll was up only 18k (expected +70k), the Unemployment Rate shot from 4.7% to 5.0%, although Hourly Earnings were +7 cents. Job growth occurred in professional services and health care, but plunged in construction, manufacturing, and retail sectors. The increase in unemployment, both on a month-to-month basis and in terms of what it implies for the cumulative increase since last spring, is what usually happens when the economy is headed into a downturn. After the numbers the 10-yr yield stands at 3.86% and mortgage prices are mixed versus yesterday afternoon.

• Chase Home Equity made some changes, effective next week. They capped loan amounts at $350,000 when the CLTV is greater than 80% or FICO is less than 700, lowered the loan cap to $500,000 when the CLTV is 80% or less and FICO is 700 or greater, set the maximum DTI at 45%, and eliminated “Investment collateral”.

• PHH, who owns PHH Mortgage, the nation's 11^th largest residential servicer, has called off its sale to General Electric, which had planned to flip the mortgage and fleet lender to The Blackstone Group, an investment banking firm. Back in September, Blackstone first admitted that it was having trouble securing enough debt financing to complete the deal.

The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators launched a Web-based mortgage licensing system on Jan. 2, as promised, with the initial participation of seven states. The Nationwide Mortgage Licensing System is designed to automate and streamline state licensing of mortgage lenders and brokers, track and identify bad brokers, including originators that move from state to state. Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York, and Rhode Island are participating in the initial start-up, but forty other states have indicated their intent to transition to the system.

My son Robbie announced yesterday that he was going to have plastic surgery on his “hind-section.” He claims that his old one has a crack in it.

Rob