I am not a big fan of rumors. (Although they say that language was invented so that people could gossip.) Last Thursday was an example of a rumor whereby CitiMortgage was ending their entire wholesale business channel. It was apparently started by a client, reportedly in Southern California, who was suspended with cause by Citi. One of their account executives sent the message that Citi exited TPO, rather than sharing that his company had been shut off. At this point, Citi’s legal department is probably involved…

This story, however, is not a rumor. Fannie Mae, now the largest foreclosure prevention company in the world, laid off several hundred employees in technology, administration, communications, and their single family unit. They do, however, plan to hire a similar number of people in the Dallas area, where the company bases its anti-foreclosure unit. Overall, the total number of Fannie employees should remain the same in 2009 as in 2008, at just over 5,500.

Speaking of them, Fannie will change its pricing from $50 to $75 per exercised Property Inspection Waiver (PIW) for whole loans purchased on or after February 1, 2009 and MBS pools with an issue date of February 1, 2009 or later. 

Last week was not a good week for Treasury yields, although mortgages, on a relative basis, held in better. In fact, Treasuries had their largest price loss since last June, and this week may not help. The Treasury Department will be selling $78 billion in two- and five-year notes and 20-year Treasury Inflation Protected Securities, or TIPS, along with $66 billion in three-, 10-, and 30-year securities next month, which equals to an estimated $62.5 billion in 10- year duration equivalents. That is a lot of supply for the market to absorb, China is closed for the Year of the Ox celebration, and the rules of supply and demand tell us…

We do have a FOMC (Federal Open Market Committee) tomorrow and Wednesday, but how much lower can overnight rates go? Most believe that much of the meeting will be spent reviewing these programs, their effectiveness and challenges the Fed will face in running them and one day unwinding them. Aside from the Fed meeting, rates have a fair amount of news to digest. Today we have Existing Home Sales and Leading Economic Indicators. Tomorrow we have Durable Goods and Consumer Confidence. Nothing on Wednesday, then on Thursday we have Jobless Claims and New Home Sales, followed by Friday’s GDP number, Chicago Purchasing Manager Survey, and Michigan Sentiment Index, and the Employment Cost Index. Rates have crept up, with the 10-yr at 2.64% and mortgages worse by about .125 in price.

The Obama's first night in the White House…

"What a day!" Michelle says.

"Phew, yeah...what a day!"

"I'm exhausted. Could you get the light, Barack?"

"Yes I can! I will not only get the light, I will shine the light for all Americans and show them the way through the darkness! It is a light that arises from the hopes and dreams of the old and the young, the black and white and yellow and red and brown, the gay and the straight, the rich and the poor! It is a light on whose rays the promise of hope...and opportunity...and achievement...all soar to a distant, brighter future! But it will take all of us, working together in a spirit of shared sacrifice and commitment, to make that light a beacon of progress. And I say to you tonight: This is our moment! This is our bedtime! This..."

"Oh for god's sake never mind, I'll do it myself..."