Second, Chase, American Express, US Bank, Capital One, Bank of New York Mellon Corp., State Street Corp., BB&T Corp. and Northern Trust, Goldman Sachs and Morgan Stanley paid back billions in government investment (TARP), after they all obtained approval last week to pay it back. That is a start in the $700 billion Troubled Asset Relief Program. Yesterday was the first day that banks could pay back the money. Eight other banks received approval last week to repay the government funds.

Third, CitiMortgage announced that LMI pricing incentives are available through them in certain markets, targeted at helping eligible loans in selected low-to-moderate LMI geographic areas for a limited time only. Operators standing by! The deal goes for two months, and the loans must be located on Citi’s list of state, County, and MSA’s – basically low or moderate income census tracts. Skeptics might say that this is a return to extending loans to borrowers who may not qualify, but that is not for me to say. See Citi for details.

Lastly, so I guess this would four good things, inflation appears to be very tame, which, in one way of thinking, points to a relatively slow economy, which in turns suggests that rates will stay low or perhaps move even lower. (See below, however, as rates are up today on the jobless claims data.)

Unfortunately, but entirely expected, mortgage applications in the U.S. fell last week to the lowest level since November. The MBAA index of applications to purchase a home or refinance a loan dropped 16% in the week ended June 12, with refinancing down 23% and purchases down 3.5%.

Bank of America Home Loans Correspondent group told customers that after Monday (earlier this week) "Expanded Approval" recommendations will no longer be eligible with DU Refi Plus, and told them that since DU "may still approve this feature combination and the Correspondent Lending Web site will not restrict these commitments until a future system release. Therefore, clients are required to manually apply this new policy." BAHL followed Fannie guidelines and told us that after July 1 the borrower may receive no more than $250 cash back at closing, that DU Refi Plus mortgages are ineligible for temporary interest rate buydowns, and that although new single premium lender paid mortgage insurance policies may be obtained on DU Refi Plus transactions if the current loan is subject to a lender-paid policy, the refinance is ineligible for the DU Refi Plus program.

Beginning yesterday, Franklin American began accepting locks on loans originated under Fannie Mae’s DU Refi Plus program which do not require mortgage insurance per the DU Findings. The DU Findings must contain the Refi Plus messaging (as detailed by Fannie Mae in recent Announcements) and meet all FAMC product parameters as provided in the FAMC DU Refi Plus Product Description. Contact the Franklin American rep for details.

What is the market up to this morning? New claims for jobless benefits rose last week but the number of People staying on the benefit rolls after collecting an initial week of aid fell for the first time since January. Jobless Claims were up 3,000, more than expected, but so-called “continued claims” dropped 148,000 – better than expected and the largest one-week drop since late 2001. On top of that, the 4-week moving average for new claims dipped to its lowest level since mid-February. We still have Leading Economic Indicators and the Philly Fed ahead of us, but for now 30-yr mortgage prices, and the 5-yr Treasury, are worse by .375-.5, and the 10-yr yield is at 3.74%.

 A blond decides to try horseback riding, even though she has had no lessons or prior experience. She mounts the horse, unassisted, and the horse immediately springs into motion. It gallops along at a steady and rhythmic pace, but the blond begins to slip from the saddle.
In terror, she grabs for the horse's mane, but cannot seem to get a firm grip. She tries to throw her arms around the horse's neck, but she slides down the side of the horse anyway.
The horse gallops along, seemingly impervious to its slipping rider.
Finally, giving up her frail grip, the blond attempts to leap away from the horse and throw herself to safety.
Unfortunately, her foot has become entangled in the stirrup, and she is now at the mercy of the horse's pounding hooves as her head is struck against the ground over and over. As her head is battered against the ground, she is mere moments away from unconsciousness when to her great fortune Bill, the Wal-Mart greeter, sees her and unplugs the horse.

Rob

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