I know that I’ve been in the mortgage banking business too long when my children start using the trendy mortgage-banker phrases. The other day I asked my daughter to clean up her room, and she replied, “Dad, let’s circle back on this tomorrow – I have other things to do. And then we can close the loop.” And when I asked my son about his grades, he suggested that I “reach out” to his teachers if I had questions, and then he said, “At the end of the day, what difference do grades make anyway?” And lastly, when I called my dog off from biting the postman and was scolding her, she gave me a look that suggested, “Got it, got it, got it.”

If one is easily offended, please don’t view this mortgage-related youtube clip. Many, however, may find it entertaining. http://www.youtube.com/watch?v=tZ42ChFJiaw

Carteret Mortgage, a broker out of Virginia that originated more than $4 billion a few years ago, is exiting the biz. Funds, apparently, are tight, with the president saying, “Technically, we are not out of business. We still have licenses, the phones work, etc. We will continue paying full commissions as long as we can. Just know that as time goes on, that will get harder and harder to do.  I have laid off the entire admin staff to free up money to pay out the loan officers.  Every cent we get, we are using to pay off the loan officers and reserve accounts. You have to get the money in and paid before we get liens on our bank accounts….There is no one in licensing. Obviously, do not try to hire anyone. Do not originate any more loans in the name of Carteret. I can guarantee payment of loans closing soon, but not things thirty days out. If you have to originate something, do it with the plans on moving it to your new employer before it closes.” You can feel their pain.

I decided that my 4.75% mortgage rate was too high. So I thought I’d join the hordes of borrowers trying to get their note modified. I saw the smiling face on http://gomodify.com/index.asp,and figured that they could help. For $2,995 up front, they’d work with me. The salesperson threw in the words “Fannie”, “Freddie”, and “approved” into one sentence, until he realized that I was in the business, and then hung up. It is too bad that the information that he was giving me just didn’t quite make sense, and reminded me of the scams that we’re all hearing about. (Not that gomodify is a scam!)

The newspapers are filled with reports from the Democratic convention, McCain picking his running mate today, and hurricane Gustav bearing down on the Gulf of Mexico. Let’s face it – there wasn’t much going on in the mortgage biz until the news hit of E-Loan’s parent, Banco Popular out of Puerto Rico, selling $1.17 billion worth of loan and servicing assets in the United States to Goldman Sachs as it seeks to “increase liquidity and reduce risk.” I don’t know what ramifications this has for E-Loan, but the quote on the news said, “We are continuing to narrow the scope of our mainland U.S. operations that are most exposed to the credit and mortgage markets, by leveraging on our core strengths in Puerto Rico," Chief Executive Richard Carrion said in a statement. Popular, the parent of Banco Popular, expects to report a loss of about $450 million related to the transaction, which is expected to close in the fourth quarter.

The bond market will close early today, so don’t look for any kind of rate improvements later in the morning, and many mortgage shops are closing early anyway. The news this morning was not necessarily bad for rates: U.S. Personal Income fell in July, and Personal Spending also dropped. Personal Income was -0.7% in the month, the sharpest decline since a 2.3% plunge in August 2005 after Hurricane Katrina (3 years ago today!). Consumer spending, which accounts for about two-thirds of national economic activity, was +0.2%, as expected, the slimmest gain since February, after gaining 0.6 percent in June. However, inflation-adjusted spending dropped by 0.4 percent, the sharpest slide in four years. After this, the 10-yr is at 3.82% and mortgages are worse by .125, probably more due to the recent improvements and the early close rather than this economic news.

Thank you Larry C.:

In a small Texas town, a new bar/tavern started a building construction to open up their business.  

The local Baptist church started a campaign of petitions and prayers to block the bar from opening. Work progressed, however, right up till the week before opening, when a lightning strike hit the bar and it burned to the ground.
The church folks were rather smug in their outlook after that, till the bar owner sued the church on the grounds that the church was ultimately responsible for the demise of his building, either through direct or indirect actions or means.  

The church vehemently denied all responsibility or any connection to the building's demise in its reply to the court.
As the case made its way into court, the judge looked over the paperwork.  At the hearing he commented, "I don't know how I'm going to decide this, but as it appears from the paperwork, we have a bar owner who believes in the power of prayer, and an entire church congregation that doesn't."

Rob