Parent’s like to think that their son or daughter
might go into the same profession in which they work. I got my son’s
report card in the mail on Saturday, and three teachers had written comments
about him. They were, “Since my last report, your child has reached rock
bottom and has started to dig.” “Your son sets low personal
standards and then consistently fails to achieve them.” And, “If
your son were any slower, he'd have to be watered twice a week.” Yep
– destined for mortgage banking!
For any agent, or anyone in the business for that matter,
who would like to know where the Fed thinks mortgage origination is heading,
along with a brief history, they must visit http://www.stlouisfed.org/publications/cb/2008/b/pages/page_3.htmlThe gist of it is the quote, “There is no realistic prospect that the
private-label MBS model will return to life in the near future. The most likely
future for the U.S.
mortgage market is a return to its past—namely, the bulk of mortgage
funds will be provided by insured depository institutions and the GSEs.
What is still unclear is whether, and to what extent, the federal government
will intervene to create entirely new regulations and institutions that could
usher in another era in the evolution of the mortgage market.”
Although the business channels will continue on “as
is”, is today the last official day of “Countrywide”? Love
them or hate them, one must admit that in 1969 up sprang an innovative and
entrepreneurial mortgage banking firm – arguably one of the most
entrepreneurial in our business in history. They, and their chairman, have
“taken it on their chin” in the last few years, but the headlines
don’t remind us of the millions of home loans that were good. In a
related story, Bank of America
on Thursday said it expects to eliminate about 7,500 jobs over the next two
years after it completes its acquisition of Countrywide, or about 3 percent
of the combined companies' work forces. Bank of America said it ended March
with about 209,100 employees while Countrywide said it employed about 50,400 at
the time. The cuts will occur nationwide and mostly in areas where the
companies have significant overlap, such as staff support, affected employees
will be notified in the third quarter and will offer severance packages to
eligible workers.
Fortes Financial finalized their deal with the
former wholesale division previously belonging to National City Mortgage. Fortes,
who does both retail and wholesale, has production offices in Atlanta, Chicago,
Dallas, San Diego and Frederick, Maryland, and the former National City staff
became Fortes employees on April of this year.
We had a nice little improvement in rates at the end of last
week, and again this morning with the 10-yr at 3.99% and mortgage prices better
by .125. We ended the economic news week with the University of Michigan
Consumer Sentiment Index, which fell to 56.4 in
June, the lowest level in 28 years. The measure averaged 85.6 in 2007 –
of course gas & food prices were lower, the credit crisis was not as bad as
it is now, and house prices hadn’t fallen as dramatically. Of course, at
this point anyone with any money in the stock market knows that equities fell
last week, as did expectations of the Fed increasing rates. In their
post-meeting statement, the Fed did not indicate any intention in the near
term to raise the overnight rate, and the market is now only giving a 26%
chance of a Fed increase at their next meeting August 2nd.
Speaking of the economy & rates in this short week,
today's June Chicago Purchasing Manager report is expected to fall -1.1 points
to 48.0, leaving the index below the key level of 50 for the 4th
consecutive month. (A level below 50 signals recessionary conditions in
the Chicago
area.) Due out tomorrow is the June ISM manufacturing index and it is
expected to drop -1.0 points to 48.6. The national ISM has also been
under the boom/bust level of 50 for 4 months. The Institute of Supply
Management (ISM)’s index measures manufacturer sentiment by surveying
trade executives on current business conditions. The Commerce Department post
May’s Factory Orders data Wednesday, which is similar to the Durable
Goods Orders report that was released last week except this week’s report
covers both durable and non-durable goods. Thursday will be an interesting
day, as the bond market is closing early due to the holiday, and we have the
Labor Department’s June unemployment rate, number of new payrolls added,
and average hourly earnings. Analysts are expecting to see the unemployment
rate to slip 0.1% to 5.4%, while 50,000 jobs were lost and a 0.3% rise in
earnings.
A man walks into a bar with a slab of asphalt under his arm.
He says, "A beer please. And one for the road."
Rob
