1 in 10 Americans In Mortgage Trouble, Credit Suisse Closes Mortgage Unit, Economic Preview for Week

Anyone over age 40 should check out this link. (You’ll need sound.) (Thank you Paul W.)

Credit Suisse Closing Subprime Unit
Lime Financial, out of Oregon, is gone. “Credit Suisse is closing Lime Financial and exiting the residential mortgage origination business to focus on higher margin businesses where we have competitive advantages and strong franchises, and that support the acceleration of our integrated bank model.” Current loans in the pipeline will be closed and all must be funded by the 16th. Credit Suisse is reducing their headcount by 5,300 and reducing overhead. LIME had over 150 employees, in 49 states, and reportedly funded about $40-50 million per month.

Freddie Mac Underwriting Changes
As announced by Freddie Mac in their October 17th Guide Bulletin, Loan Prospector was updated on December 7, 2008 to include revised eligibility parameters including revised LTVs/CLTVs and new feedback messages which are intended to align more closely with pricing and current credit requirements. Any applicable eligibility requirements are detailed on the LTV matrix and within the Product guidelines. It’s important to note that loans submitted to LP as of yesterday will no longer receive an Accept Plus Documentation Level. All loans will require income/asset documentation in accordance with the Findings. Fannie is scheduled to roll out DU Version 7.1 this coming weekend. This release will contain revised eligibility parameters and LTV’s as described in Fannie Announcement 08-22. FAMC has previously released and implemented the majority of the policy/credit changes announced by Fannie Mae to date with the exception of a few items. Most investors have already incorporated the changes.

1 in 10 Americans In Mortgage Trouble
The MBAA said that one in ten Americans are either behind on their mortgage payments or were in foreclosure during the third quarter. Mortgages which are 30 days or more overdue rose to nearly 7% while loans already in foreclosure rose to almost 3%, the highest in 3 decades. “Subprime” mortgages, whatever those are exactly, continued to perform poorly according to the MBAA, with more than 19.5% of those loans seriously delinquent in the third quarter. Initiations of foreclosure proceedings have slowed due to interventions rather than any improvement in underlying conditions.

Market Update, Economic Preview
The market? Well, Friday, as one recalls, we had a Payroll number that was far worse than expectations, with widespread job losses and workweeks shortening. (The trend in hours worked shows a brutal 6% decline if looked at annually.) There is no scheduled news for today. Tomorrow we have Pending Home Sales, which isn’t exactly market-moving, nothing on Wednesday, and then on Thursday we’ll see Jobless Claims and the Trade Balance. Friday we have the Producer Price Index, Retail Sales, and the Michigan Sentiment Survey. With no news today, bonds are watching stocks, and stocks are watching the auto industry bailout – no one wants to be responsible for making things worse. Look for some middle-of-the-road bridge loan which could provide the auto industry with a loan to keep them from going bankrupt and to give the Obama administration time to assume office and consider a more permanent long term solution. (Speaking of stocks, we’re up this morning after President-elect Obama pledged to launch the largest U.S. infrastructure investment since the 1950s to stimulate economic growth.)

Rate Locks, Timing Closings
The 10-yr yield has moved up to 2.70%, still incredibly low, and mortgage prices have inched lower (worse) by about .125. Remember that refi boom from two weeks ago? We’re about halfway through the usual lock period, and hopefully pipelines are moving along. As one top agent put it, “I only have eight hours per day to get loans and since each one takes two or three days to get one, five days to underwrite it, seven days to convince the underwriter that there are no more comps otherwise my licensed appraiser would have used them in the first place, 5 days to get to docs and finally 4 days in church praying we fund. Then I need to make sure the check goes through accounting and gets back to me before the company files for TARP money.”

Daily Humor
Looking for a mobile home questionnaire in order to weed out the “mobile” homes….you know the ones with a hitch or axle……

If you pay registration instead of prop taxes your “property” does not qualify.

If you have a luggage rack instead of an attic your “property” does not qualify.

If you have a gas cap instead of a gas meter your “property” does not qualify.

If your bed has a seat belt your “property” does not qualify.

If when you move you jump in the front seat and turn a key your “property” does not qualify.

If your advertise FOR SALE in Auto Trader instead of the MLS your “property” does not qualify.

If your property lines are painted on……..
If your home has flashing lights year round…….