You know you’re in the mortgage business when a) You actually look forward to the “LinkedIn” updates, and b) you think that playing “Brickbreaker” on your Blackberry makes you feel productive.

Over the last few years, Downey Savings bought its share of loans from brokers. They were seized Friday. http://www.bloomberg.com/apps/news?pid=20601087&sid=arqqycIZzpZg&refer=home

They, along with PFF Bank & Trust (Pomona, CA) were taken over by U.S. Bancorp. Downey is the third largest bank to fail this year, and US Bancorp has agreed to change the terms of mortgages taken out by Downey and PFF customers, in a program similar to the one the Federal Deposit Insurance Corp is using for mortgages held by IndyMac. The FDIC agreed to share losses on the acquired loans with the bank's U.S. Bank unit. U.S. Bank had 2,556 branches before this transaction, of which 353 were in California. Downey has 170 branches in California and five in Arizona while PFF Bank has 38 branches in California. So far this year, 22 banks have failed, the most since 1993 when 50 banks failed.

Speaking of the Federal Deposit Insurance Corp, they voted last week to strengthen the guarantee on bank bonds, clearing the way for financial institutions to access credit markets with the backing of the U.S. government. The FDIC will provide the guarantee on senior unsecured bank debt, ensuring creditors get a timely payment of principal and interest in the event of a default. Banks had said bond investors would reject the debt because the original guarantee wasn't strong enough to put the bonds on par with other government or government-backed securities. The FDIC excluded from the program any loans with maturities of less than 30 days. In theory this should help create investor demand for the guarantee.

There are rumors about Fannie changing their DTI. A senior underwriter at Fannie Mae responded to me and said, “No, I hadn't heard any rumors placing Fannie with Freddie's DTI announcement. We know that Freddie announced that in March 2009 they were going to reduce the DTI to 45% on all products except Streamline Refinances.  As you know, Fannie has a 45% max DTI on Jumbo Conforming but currently that is the only program that imposes the DTI restriction.”

Citigroup executives have arranged a deal whereby the U.S government will guarantee $306 billion of troubled mortgages and other assets. Citigroup will also get an additional $20 billion of cash from the U.S Treasury. In return for the guarantees, the US government/US taxpayer will receive $27 billion of preferred shares paying an 8% dividend. Said another way, our government will guarantee any losses on more than $300 billion of Citi's troubled assets, and will make a fresh $20 billion investment in the bank. On the news, stocks have rallied, but bonds have not. The 10-yr is worse by .5 in price, with the yield up to 3.23%. Fortunately mortgage prices are roughly unchanged from Friday afternoon.

There is an e-mail making the rounds saying that, “It would be better to give cash or a present than a gift card this year. Stores across America are being scheduled to close after the Christmas season due to economic difficulties and bankruptcy, which would render most cards useless.” This is sobering: Circuit City closing 155 stores nationwide. Ann Taylor is closing 117 stores nationwide. Eddie Bauer has already closed 27 shops in the first quarter and plans to close up to two more outlet stores by the end of the year. Women's retailer Cache announced that it is closing 20 to 23 stores this year. Lane Bryant, Fashion Bug, and Catherine’s are closing 150 stores nationwide. Talbots & J. Jill will be shuttering all 78 of its kids and men's stores, plus another 22 underperforming stores. The Gap Inc. is closing 85 stores. Foot Locker is closing 140 stores. Wickes Furniture is going out of business. Levitz/BOMBAY is closed. The owner of Zales & Piercing Pagoda is closing 105 outlets. The Disney Store may close up to 98 stores. Home Depot is shutting down 15 core retail stores. Macy's is closing 9 stores. Video rental company The Movie Gallery is eliminating 160 stores. Gone are 33 Pep Boys stores. Sprint Nextel 125 retail locations. Ethan Allen Interiors is closing 12 stores, and Wilson Leather is closing all 260 mall stores. Pacific Sunwear will close its 154 Demo stores. The Sharper Image is in bankruptcy and 90 of its 184 stores are closing. KB Toys posted a list of 356 stores that it is closing around the United States as part of its bankruptcy reorganization. Dillard’s Inc. is shutting down 6 more stores. Starbucks: Starbucks will close approximately 600 company- operated stores in the U.S. Kirklands home décor will be closing nearly 130 stores nationwide. Linens 'n Things is closing 120 stores. Dell Inc. closed its 140 kiosks in the United States, and Liz Claiborne Inc. said it's closing the entire 54-store Sigrid Olsen chain. Lone Star Steak House is shutting 27 stores, Rite Aid 28 stores, and Big Dollar is closing 10 establishments.

A guy goes into the bar, grabs a stool, takes a seat and orders a beer. No one is around but he hears, "Nice Shirt" in a very soft, low voice. Looking around, he sees nobody and shrugs it off. A minute or 2 later, he hears in a soft tone, "Nice Tie". Again he looks around and sees himself alone at the bar.

When the bartender shows up with his drink, he tells the bartender he keeps hearing things. When the bartender asks for details, the customer retells the story. Bartender then replies, "It's the nuts - they're complimentary".