What is AMI? It stands for “area median income”. In the old days, HUD issued the median income estimates, but now the Federal Housing Finance Agency does them. What good are they? Well, for starters, anyone who specializes in low and moderate income borrowers uses them, especially for Freddie Mac’s Home Possible Mortgage. Although they kick in after November 1, you may want to check them out: Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-22

There is not much going on with the investors aside from a Flagstar note below – perhaps it is the “Dog Days of Summer”. Speaking of that, and Philadelphia, where “Hold your beagle, Vick’s an Eagle!” was a darned clever headline, the Philly Fed Survey was stronger than expected at 4.2. This is the highest it has been since November 2007. (I love these numbers like “4.2” – what the heck does that mean?) We also had Leading Economic Indicators +.6% for July, which is the first time since 2004 that LEI has gone up 4 straight months!

Sugar prices are the highest they’ve been since the Carter Administration. I’d heard a report that our government, in order to protect US sugar producers, requires that 85% of sugar be from US sources. I couldn’t find anything to substantiate it, but doing the research turns up some mildly interesting websites like http://www.fas.usda.gov/itp/imports/ussugar.asp

Regardless, the market took sugar prices, the Philly Fed, and LEI in stride, and in fact mortgage prices traded in a very narrow range for most of the day. Volumes, both in locks and mortgage-backed security trading, are light. And we still have another week or two until Labor Day!

A cloud on the horizon is the auction next week. The Treasury will be selling $109 billion: $30 billion in 6-month bills, $39 billion in 5-yr notes, $27 billion in 1-yr T-bills, $42 billion in 2-yr notes, $31 billion in 3-month T-bills, and $28 billion in 7-yr notes. Holy smokes! This, by anyone’s measure, is a lot of supply, but given that originations are a little slow, mortgage prices might do well relative to Treasury prices. Earlier this month the 10-yr Treasury hit 3.89%, but it got down to 3.40% Wednesday, but really, how much lower can rates go unless there is a big meltdown in stocks? Currently mortgages are about unchanged from Thursday afternoon, and the 10-yr is at 3.44%.

Flagstar announced government loan FICO price adjustment changes. Starting Monday, look for adjustments to be worse by .250-.50. Flagstar also came out with updates to their Freddie Mac Relief Refinance Program, saying that eligible loans could now go to 125% LTV.

A man wanted to get married. He was having trouble choosing among three likely candidates. He gives each woman a present of $5,000 and watches to see what they do with the money.
 The first does a total makeover. She goes to a fancy beauty salon, gets her hair done, new makeup; buys several new outfits and dresses up very nicely for the man. She tells him that she has done this to be more attractive for him because she loves him so much.

The man was impressed.

The second goes shopping to buy the man gifts. She gets him a new set of golf clubs, some new gizmos for his computer, and some expensive clothes. As she presents these gifts, she tells him that she has spent all the money on him because she loves him so much.

Again, the man is impressed.

The third invests the money in the stock market. She earns several times the $5,000. She gives him back his $5,000 and reinvests the remainder in a joint account. She tells him that she wants to save for their future because she loves him so much.

Obviously, the man was impressed.
The man thought for a long time about what each woman had done with the money he'd given her.
Then he married the one with the biggest chest.

Rob

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