Jay Leno recently said, “This week, the Nobel Prize for economics went to a highly intelligent economist whose theory is a little hard, I think, for the average person to comprehend. He determined that it was bad business to give loans to people who can't pay them back!” In that vein, the Fed announced a revised $150 billion rescue package for AIG, who reported their 4th straight quarterly loss.  The government will reduce the original loan to $60 billion, buy $40 billion of preferred shares and purchase $52.5 billion of mortgage securities owned or backed by the company.

Don’t forget that the bond markets are closing early today, and are closed tomorrow entirely. Most agents are hesitant to lock, in spite of many mortgage companies remaining open, since investors are hesitant to be aggressive with the rates & prices.

Attached is the new loan limit information that has been distributed. Hopefully you can read the workbook. I have also attached the memo, which, in a tantalizing way, says that HUD will accept comments for 30 days to appeal their loan limits. HUD’s website, that shows the FHA limits, has not been updated yet. So that is a bit of a mystery. https://entp.hud.gov/idapp/html/hicostlook.cfm

Two more US banks failed over the weekend: Franklin Bank Corp and Security Pacific Bank were turned over to other banks. And Fannie Mae said its third-quarter loss widened to $29 billion in its fiscal third quarter ending Sept. 30, from a loss of $1.52 billion, or $1.56 a share in the year-ago period. Ouch.

Thornburg Mortgage’s Larry Goldstone will host a conference call on Wednesday, November 12, 2008, from 10:30 a.m. to noon EST to discuss third quarter results as well as provide a general update on the company, and will release their latest quarterly results this evening. The U.S. teleconference dial-in number is (800) 762-6085. A replay of the call (at (800) 475-6701, access code 968830) will be available beginning at 1:30 p.m. EST on November 12th.

Friday the unemployment data was worse than expected, which usually leads to lower rates. But Treasury and mortgage-backed securities worsened as investors took profits and sold. The Treasury Department will sell $25 billion in three-year notes today, followed by $20 billion in 10-year notes Wednesday and $10 billion in 30-year bonds Thursday. (Once again, LIBOR rates dropped, as they have since October 10th!) The unemployment news caused some economists to drop their GDP forecasts, and to expect another 50 basis points of Fed easing by year-end. If you are “hunkering down” and cutting your spending, the odds are that others are doing the same thing, and there is a ripple effect.

Wells Fargo wholesale made it known that, “Because of retractions made by Mortgage Insurance companies, effective with loans locked on or after Nov. 17, 2008, California loans that require borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI) are no longer allowed with credit scores ≤ 719 and LTV's > 80%.”

A girl was visiting her blonde friend, who had acquired two new dogs, and asked her what their names were.

The blonde responded by saying that one was named Rolex and one was named Timex. 

Her friend said, “Whoever heard of someone naming dogs like that?”
“HELLLOOOOOOO......,” answered the blond.  “They're watch dogs!”