The economy is not good. I'll tell you how bad the economy is. I was in Beverly Hills yesterday, and I saw a guy driving an American car!

If you’re located in California, be prepared to order new business cards for everyone.  Starting on July 1st of this year, all originators in CA have to start displaying their D.R.E. license number on letterheads and business cards. 

With Nat City exiting, smaller mortgage banks are once again reviewing their warehouse facilities. Woe to anyone who was not doing this months ago, as they have had fundings held up or canceled. Warehouse relation managers are searching their rolodexes for warehouse contacts at companies like GMAC, Comerica, Viewpoint, Colonial, Countrywide, and small regional institutions such as Gateway here in the Bay Area. Certainly buying a bank would help a funding issue, but buying a bank typically takes upwards of a year or more, and many mortgage banks find that they don’t have the capital, the time, or the discipline to go through the process.

Barclays shares are up 15% this morning on news that may sell its iShares unit, which operates the popular exchange-traded funds. In addition, PMI lost less money last quarter than they were expected to lose – I think that is good news. On the flip side, Flagstar’s headquarters were rumored to have laid off Ops staff, given signs on the horizon of slower volumes ahead. OK, I am no great sage, but I am hearing some positive signs across a number of environments. Basically, the thinking goes like, “Hmmm, real estate values are down, not only do I still have my job but I have some cash sitting around, and rates are very low – and may not go lower. So maybe I will stop renting and buy a place (or pick up that non-owner occupied property, or that vacation home), or at least see what is out there.” The market will tell you that at some price, there is a buyer for everything. http://cbs5.com/business/real.estate.sales.2.956968.html

Just Friday we saw the Michigan Consumer Sentiment Index rise slightly from February’s level to March. An analysis of the components showed that pessimism isn't getting worse and perhaps hinting that pessimism may now be receding. Tell that to the folks at Freddie Mac, who reported a loss of $23.9 billion for the fourth quarter and is asking the Treasury for an additional $31 billion. The Wall Street Journal reported that “For all of 2008, Freddie reported a loss of $50.1 billion, compared with a year-earlier loss of $3.1 billion. The losses over the past two years exceed the total of about $42 billion earned by Freddie from 1971 through 2006.

And while we’re on Freddie, the Journal article also reports that their new refinancing program doesn't allow borrowers to shop around for the lowest fees. “Brad German, a spokesman for the government-backed provider of funding for mortgages, said any borrower with a Freddie-backed loan who wants to refinance under the program needs to do so through the company that services his current loan. Borrowers with Fannie-backed loans will be able to seek refinancings under the program from more than 30,000 lenders nationwide. While Fannie is letting borrowers shop around, those deemed a higher risk are hit with fees that can total 3% or more of the loan balance, the WSJ reported. Freddie's maximum fee on these refinancings is 0.25%.

Chase Correspondent Lending announced a minimum credit score requirement on FHA and VA products excluding non-credit qualifying FHA Streamline Refinance loans and VA IRRRL transactions. They have expanded the 620 credit score requirement to “include non-credit qualifying FHA Streamline Refinance loans and VA IRRRL transactions effective March 13, 2009. A tri-merged credit report is the minimum credit report that can be used to validate the credit score requirement is met. A copy of the credit report must be included in the loan file delivered to Chase.”

AmTrust is reportedly moving towards a true 1,2,3 tier system in April. Tier 1 clients (those with the best pull through – 75% - and quality) may be eligible to see high balance loans at a .50 through rate sheet, faster turnaround & preferential treatment. Brokers who sell to AmTrust with poor pull through will be cut off entirely.

This morning, bright and early, we find the 10-yr back up to 2.98% and mortgage prices worse by .125-.250. How does the week look for economic news? Today we have Empire Manufacturing, Industrial Production, and Capacity Utilization. Tomorrow we’ll see Housing Starts and Building Permits, but more importantly the Producer Price Index. On the 18th we have the Consumer Price Index for February. On Thursday Jobless Claims, Leading Economic Indicators, and the “Philly Fed”. Oh, and yes, we do have a Federal Open Market Committee meeting this week, which adjourns on Wednesday with a rate decision for overnight rates at 11:15AM PST. Don’t bet on any increase from the 0% target, but the Fed may announce other measures to stimulate the economy.

Two Irishmen were sitting in a pub having beer and watching the brothel across the street.  They saw a Baptist minister walk into the brothel, and one of them said, "Aye, 'tis a shame to see a man of the cloth goin' bad."

Then they saw a Rabbi enter the brothel, and the other Irishman said, "Aye, 'tis a shame to see that the Jews are falling' victim to temptation."

Then they saw a Catholic priest enter the brothel, and one of the Irishmen said, "What a terrible pity...  one of the girls must be quite ill."

_________

Murphy was staggering home with a pint of booze in his back pocket when he slipped and fell heavily. 

Struggling to his feet, he felt something wet running down his leg. 

"Please Lord," he implored, "let it be blood!!"

Rob

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