What’s the difference between a pigeon and a realtor?

The pigeon can still leave a deposit on a Mercedes.

(Thanks Kurt L.)

Whatever you did this weekend probably didn’t match the Federal Reserve Board of Governors: announced two initiatives designed to bolster market liquidity and promote orderly market functioning, and approved the JP Morgan – Bear Stearns deal. First, they authorized the Federal Reserve Bank of New York to create a lending facility to improve the ability of primary dealers to provide financing to participants in securitization markets. It is available today, and will be in place for at least six months and may be extended as conditions warrant. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment-grade debt securities. Second, the Federal Reserve Board decreased the primary credit rate (“Discount Rate”) from 3.5% to 3.25%. Lastly, the Board also approved the financing arrangement announced by JPMorgan Chase and Bear Stearns where Bear is being purchased for 1% of its value only 16 days ago! Tomorrow, the FOMC will meet, and obviously the odds that the Fed will cut the Fed Funds rate by 1.0% have increased. Mortgage prices are really a mixed bag (“where should they be priced?”) with the 10-yr down to 3.41% currently. 

• Wilbur Ross is buying $53 billion in Option One subprime servicing (owned by H&R Block) for $1.1 billion.
• WaMu pricing for the “jumbo conforming” product? Although it varies by coupon, the difference is roughly 2.5 points in price, about .625% in rate over regular conforming product. JP Morgan Chase checked in with 2-3 point price adjusters, based on loan attributes, similar to WaMu.
• Want to read the latest RESPA reform proposal? http://www.namb.org/namb/GA_Home.asp?SnID=1106143601
• How about the latest appraisal guidelines, with the chance to comment before the end of April? https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/index.jsp
• Countrywide’s new soft market policy is implemented today. CW also announced that their enhanced appraisal requirements are effective 4/15: except for FHA/VA, all loans delivered for purchase are subject to the Enhanced Appraisal Requirements. All conforming loans program will require an AUS Approve/Eligible. Effective 3/13 the maximum LTV and CLTV for nonconforming Fast & Easy was changed to 75%, and later this week (3/21) conforming F & E will be limited to 90% LTV and 80% CLTV where subordinate financing is used. Countrywide’s Equity Programs will be eliminated 3/21, along with their House America program.
• ING is no longer offering stated product.
• Freddie Mac is telling its lenders that it will start purchasing "conforming jumbos" in May and that jumbo loans originated "retroactive to March 1" will be accepted for delivery.
• Last week Washington Savings Bank, Maryland, announced its wholesale division would cease doing business.  "As the financial markets have continued to retract, we have found, that keeping up with the multiple investor changes for products and pricing, has turned into a full time job that has too many opportunities for error. Our investors have begun to flee the wholesale channel of business, and with no place to sell these loans, TWSB has made the decision to simply exit this channel of business."
• Tower Mortgage, a wholesaler out of Rockville Maryland, “Welcome to Tower Mortgage, we're your LENDER FOR LIFE”, shut down Friday.

Anyone who has sound and can view an animated film on their computer may want to check out www.yegsz.com. It is Sam Zell’s (billionaire and real estate entrepreneur) New Year’s message dealing with the credit crunch, and is pretty entertaining. Just click on the 2007 link.

An Irish priest is driving down to New York and gets stopped for speeding in Connecticut.   The state trooper smells alcohol on the priest's breath and then sees an empty wine bottle on the floor of the car.

He says, “Sir, have you been drinking?”

“Just water,” says the priest.

The trooper says, “Then why do I smell wine?”

The priest looks at the bottle and says, “Good Lord! He's done it again!”

Rob