A jumper cable walks into a bar. 
The bartender says, "I'll serve you, but don't start anything." 

• Effective June 1, 2008 MGIC is increasing the maximum LTV/CLTV from 85% to 90% for primary residences in Restricted Markets with loan amounts greater than $417,000.
• Bank of America said that David Sambol, the Countrywide operating chief who was to lead the combined company’s mortgage business after they merge this summer, will retire. BofA said a restructured consumer banking business will instead be led by three top B of A officers - mortgage chief Barbara Desoer, consumer bank president Liam McGee, and credit card lending chief Bruce Hammond. As a consequence of Bank of America's move, Sambol will get $8 million in restricted stock in addition to $20 million in cash. Countrywide shares, which have traded at a discount to the implied value of B of A’s $4 billion all-stock offer since the merger agreement was struck back in January, shot up.
• Assured Lending, based in New Jersey, sent out the following announcement to brokers on 2008-05-27: "Due to the current market conditions in the mortgage industry, Assured Lending Corporation has decided to exit from the Wholesale Lending business effective immediately. Assured Lending Corporation has had tremendous success in Retail Lending and will continue to focus our efforts in that direction."
• HSBC will be eliminating Freddie Mac Quick & EZ programs (SISA) effective June 1, 2008.  Registrations will be accepted through June 1, 2008.
• "The government has closed down the North Andover Mass Office of Castle Point Mortgage due to suspected fraud. An in house Word document was found to be used to manipulate W2's, pay stubs and even appraisals. The Feds are now auditing the New Jersey and Maryland locations for the same offenses."
• SunTrust announced to their remaining brokers a change to their agreement, stating that if any loan sold to SunTrust pays off within 180 days of funding, the broker shall be liable for the full amount of any mortgage broker fees that the broker received. In addition, SunTrust has “the right to offset the amount owed by Broker to Lender…against any balances, credits, deposits, accounts, or monies of Broker then or thereafter held by Lender or amounts owed by Lender to Broker.”
• Thanks Donna S. in Greenbrae: Pac Union realtor's soon to have no inside lender? Fitch Ratings has cut its residential mortgage servicer ratings for Residential Capital, as the ratings agency said questions over the company’s “weakening financial condition” continue to run unanswered. ResCap consolidated the servicing operations of GMAC Mortgage, GMAC-RFC, and Homecomings Financial under its corporate umbrella earlier this year.

The GDP is the sum of all goods and services produced in the U.S., and is considered to be the best indicator of economic growth. The first revision to the 1st quarter GDP came out at +.9%, up from the originally reported +.6%. We also had Jobless Claims this morning, up to 372k from a revised 368k – very stable. The 4-week moving average is actually moving down on Jobless Claims, indicating that either the labor market is doing ok, or that people aren’t even filing claims. Tomorrow brings us the release of two pieces of data with the first being April's Personal Income and Outlays data with current forecasts calling for a 0.4% rise in income and a 0.4% increase in spending. The last report of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. An upward revision would be considered a negative for bonds.

Yesterday was not a good day for mortgages, and bond yields, as the 10-year note pushed through 4.0% and prompted mortgage selling. Why? Interestingly, as rates move up, servicers are inclined to sell lower rate mortgages, thus shedding duration, originators added forward hedges, and money managers sold mortgages. What triggered this was a better-than-expected Durable Goods report, along with a poor 2-year note auction by the government. (Today they are selling $19 billion of 5-yr notes.) That puts the 10-yr at 4.06% and mortgage prices worse by another .375 in price.

I was walking past a mental hospital the other day, and all the patients were shouting “13...13...13…”

The fence was too high to see over, but I saw a little gap in the planks and looked through to see what was going on.

Some inmate poked me in the eye with a stick!

Then they all started shouting “14...14...14…”

Rob