CitiMortgage, who continues to scale back in sellers, and also being welcomed by warehouse lenders, made some changes to their "Best Efforts Pull-Through (BEPT) Reward program". Basically, they are making the measurements simpler beginning in August - possibly due to their re-engineering efforts a few weeks ago.

Unfortunately, in mimicking the market, U.S. Bank’s Wholesale Division has made noticeable changes to their Jumbo Fixed, Treasury ARM and Second Mortgage products. After this Friday, in several of their programs, DC, GA, IL, MD, NJ, NM, NY, RI & VA were added as “declining market” states: sellers will see reduced LTV/TLTV/HTLTV’s, condos will no longer be allowed in the state of Florida, there will be new minimum FICO requirements for LTV/TLTV/HTLTV’s and lower LTV with new qualifying ratio requirements, new reserve requirements, additional 1.00 fee adjustments for FICO’s less than 680, investment properties no longer allowed, full URAR required, no short forms allowed. (For US Bank’s Second Mortgage Program, DC, GA, IL, MD, MN, NJ, NM, NY, OR, RI, VA & WA were added as “declining market” states, and it will have lower DTI requirements.)

For US Bank’s HELOC program, a minimum 700 FICO score required on HTLTV’s < 70%, a minimum 720 FICO score required on HTLTV’s  > 70% - 85%, and in AZ, CA, DC, FL, GA, IL, MY, MI, MN, OH, NV, NJ, OR, RI & WA the maximum HTLTV < 75%. (The maximum combined First Mortgage and HELOC cannot exceed $1,500,000.)

Colonial BancGroup Inc. and its subsidiary Colonial Bank, which many mortgage companies use for warehouse funding, reached an agreement with Global Consumer Acquisition Corp. for the sale of 21 Colonial Bank branches in Nevada.

AgFirst addressed Fannie Mae’s modifications to the amount of money the borrower may receive as cash back at closing on DU Refi Plus transactions.  “If the borrower is receiving more than $250.00 cash back, the loan case file cannot be underwritten as a DU Refi Plus transaction.  In response to the announcement, Fannie Mae will implement the opt-out functionality on the DU Refi Plus program.  This functionality will be made available for users who access DO/DU after the weekend of July 18, 2009.” AgFirst suggests their sellers use one of the Rural Home programs when locking, and then using the comment section “to indicate your intentions to opt-out of the DU Refi Plus program. To use the opt-out feature in DO/DU, after July 18, 2009, users should enter the phrase “Standard LCOR” in the Product Description field.”

The MBAA reported that their survey showed that last week’s mortgage applications rose again due to lower rates. Apps were up 4.3%, with refi’s up 18% but purchases down over 9%. But will these rates hold? Yesterday several investors made prices worse during the day even after the early morning news that sales at U.S. retailers rose more than forecast in June. On top of that, Producer Prices were much stronger than expected, although most believe that any kind of recovery is a long way off. The 10-yr yield hit 3.46%, and mortgages were worse in some cases by almost .5 in price.

The market today? It was pretty quiet overnight, but this morning we’ve seen the Consumer Price Index and Empire State Manufacturing Index numbers. The CPI was expected to be +.6, and the Core CPI +.6, but it was +0.7% and +.2% respectively. The bulk of the increase was due to soaring gasoline prices. Versus a year ago, the CPI is actually down 1.4%, the biggest decline since 1950. We also had the Empire State Manufacturing Index, released by the NY Fed, which indicated that conditions for New York manufacturers were flat in July. The general business conditions index increased to a level close to zero, rising 9 points, to -0.6. Still ahead of us we have Industrial Production and Capacity Utilization, but for now the markets are trading off of the CPI. The 10-yr yield is up to 3.50% and mortgage prices are worse by .125-.250.

A local priest was being honored at his retirement dinner after 25 years in the parish.

A leading local politician, and member of the congregation, was chosen to make the presentation and to give a little speech at the dinner. However, he was delayed debating mortgage regulations, so the priest decided to say his own few words while they waited.

"I got my first impression of the parish from the first confession I heard here,” said the priest. “I thought I had been assigned to a terrible place. The very first person who entered my confessional told me he had stolen a television set and, when questioned by the police, was able to lie his way out of it. He had also stolen money from his parents, embezzled from his employer, had an affair with his best friend's wife, and taken illicit drugs. I was appalled.

"But as the days went on, I learned that my people were not all like that and I had, indeed, come to a fine parish full of good and loving people."

Just as the priest finished his talk, the politician arrived full of apologies for being late.

He immediately began to make the presentation and said: "I'll never forget the first day our parish priest arrived. In fact, I had the honor of being the first person to go to him for confession."

Moral: Never, never, NEVER-EVER be late.

Rob

(For archived commentaries, check www.robchrisman.com, or to subscribe/unsubscibe write to rchrisman@robchrisman.com. The commentary is produced every business day, but there always seem to be vague e-mail “issues”, so if you don’t receive it, let me know.)