HOW CAN A STRANGER TELL IF TWO PEOPLE ARE MARRIED?

“You might have to guess, based on whether they seem to be yelling at the same kids.” -- Derrick, age 8

WHAT DO YOU THINK YOUR MOM AND DAD HAVE IN COMMON?

“Both don't want any more kids.” -- Lori, age 8

Phillip Bellante of Guardian Mortgage points out that “No one marries planning on divorce. A 2003 Harvard Law School study showed that although survey subjects knew the national divorce rate is more than 50%, they estimated their own likelihood of getting divorced one day to be about 12%. This “optimism bias” is one reason why only 1% of married couples had prenuptial agreements in a 2002 survey by Harris Interactive for Lawyers.com.” How does this relate to mortgage banking? Does anyone buy a house thinking that it is going to go down in value?

Thornburg Mortgage sold 20,000,000 shares of 10% Series F Cumulative Convertible Redeemable Preferred Stock at $25.00 per share. "Thornburg Mortgage believes it is positioned to capitalize on what it expects will be a more profitable mortgage market," the company said in the statement. Thornburg stopped accepting new loan applications earlier this month but is gradually purchasing loans again!

According to the National Mortgage News, Countrywide is contemplating slashing its work force by 7,000 to 10,000 workers, according to industry officials.

ComUnity Lending of Morgan Hill (yet another company with a letter in the middle capitalized) announced that they have “decided to mitigate the risk of the market by reducing our volume and moving to the sidelines while we wait for sanity to return to the market.  We plan on a short period of rest and re-structuring, after which we will re-enter the business aggressively.  We are committed to this business and look forward to seeing our way through this turbulent time.” They have given up their retail branches, and have scaled back to two production (wholesale) branches.

SCME, a wholesale operation based in Southern California, closed their Santa Rosa branch and have scaled back in other areas of the company.

Bank of America could be positioning itself for a full takeover of Countrywide following its $2 billion equity investment, three industry observers and an analyst speculated, although CEO Angelo Mozilo’s statement last week that there was no thought of BofA buying CW. Banking giants Chase Manhattan and Citigroup are reportedly also on the sidelines looking to buy Countrywide, according to a mortgage industry adviser.

If you need some subprime loans serviced, “who you gonna call?” The top 5 subprime subservicers are Ocwen (Florida), Litton (Texas), Mortgage Lenders Network (Connecticut), Select Portfolio (Utah), and Chase (New Jersey). National Mortgage News' ranking of the nation's top subprime lenders in 2Q shows that mortgage bankers originated $53.4 billion in subprime loans during the second quarter, the least amount in five years. In addition, subprime accounted for 6.3% of all home mortgages originated in the quarter, compared to 20.4% for all of 2006.

Yesterday Construction Spending was reported -0.4% in July, weaker than expected. And the Institute of Supply Management survey fell to 52.9 in August, the second consecutive decline and its lowest level since March, but the fact that the level is still above 50 suggests that manufacturing in still contributing to growth. For some reason the mortgage and Treasury markets focused on this strength, and down we went in price and up we went in rate. Today, however, we’re seeing some improvement. 30-yr A-paper prices are better by roughly .125 versus yesterday afternoon, and the 10-yr yield is back down to 4.52%.