The other day I was complaining to a friend about the fact
that her dog had two beds whilst my dog had none. (After all, for millions of
years dogs survived without beds, right?) She answered that she had heard that,
under a plan being considered by the Administration, any dogs that lied about
their income in the past would have a bed taken away and redistributed to a dog
without a bed. In addition, if any dog ran up their credit card bills buying
dog beds, and then wanted to get out of paying the bill and accuse the credit
card companies of being bad, there were ways to do that too. I told her that
sounded suspiciously like some of the radio ads I’ve been hearing.
Are we over the warehouse hurdle? Maybe, maybe not.
Obviously non-depository lenders with solid financials are still funding loans.
GMAC, Flagstar, Wells, Southwest Securities, Countrywide/BofA, First
Funding, Viewpoint Bank, etc., are all providing lines to varying degrees.
And smaller regional players are doing the same. So in spite of the
Chase’s, PNC, National City’s,
etc. leaving the warehouse industry, it appears that other companies have seen the
benefits and have stepped in. And I have heard little-to-nothing lately of
either Fannie or Freddie stepping in to warehouse-related businesses or
guarantees.
“Bank of America Home Loans” has made
it clear that they will be participating in correspondent, wholesale, and
retail business channels. In an announcement to brokers,
whom they told to watch for news in the coming weeks, BofA reiterated that they
are committed to the broker channel, thus continuing the channels that
Countrywide had established. This is big news, especially for brokers who six
months ago were wondering if their business was even going to be around.
SunTrust Banks reported a net loss for the first quarter of
2009 of over $815 million compared to net income of $290.6
million in the first quarter of 2008. The majority of the first quarter loss to
common shareholders was attributable, however, to a non-cash, after-tax charge
of $714.8 million related to the impairment of goodwill. The goodwill
impairment charge had no impact on their regulatory capital and tangible equity
ratios, and was in fact viewed by many as being less bad than expected.
This one slipped by me – my apologies. Metlife
announced their “Conforming Plus Temporary 2009 Fixed Rate” loan
program, which includes the temporary increase in the conforming limits above
what is currently allowed under Conforming Plus. “The new limits are
a result of the American Recovery and Reinvestment Act (ARRA) of 2009.
These limits are available in high cost areas only with a maximum loan amount
of $729,750 for a one (1) unit property ($793,750 in Hawaii).”
Is anyone getting nervous about those Treasury rates?
Although it is generally agreed that they have decoupled from mortgage rates,
the fact that the current yield on the 10-yr is up near 3% is raising some
eyebrows. Rates were helped a little yesterday by Existing Home Sales being
low, and today we’ll have New Home Sales at 7AM PST. (They are expected
to be about unchanged.) We already had Durable Goods, which fell .8% in March,
far less than Wall Street expected. It is a volatile number, but that, combined
with some decent earnings reports, could push the stock market higher again. If
anyone doubts that the economy is hurting, durable goods orders have now fallen
for seven months out of the last eight. Later today we begin to hear about
“stress tests” the Obama administration has performed on the 19
largest banks. Mortgage prices are about unchanged but the 10-yr is up to
2.97%.
An old mortgage banker of ninety was sitting on a park bench
crying. A policeman noticed this and asked him why he was crying.
"Well," says the old fellow, "I just got married to a
twenty-five year old redhead. Every morning she makes me a wonderful breakfast
and then we make love. In the afternoon she makes me a wonderful lunch and then
we make love. At dinner time she makes me a wonderful supper and then we make
love."
The policeman looks at the old man and says, "You shouldn't be crying! You
should be the happiest man in the world!"
So the old mortgage guy says, "I know! I'm crying
because I don't remember where I live!"
Rob
(For archived commentaries, check www.robchrisman.com,
or to subscribe write to rchrisman@robchrisman.com)
