A man was telling his neighbor in Sun City Center, “I just bought a new hearing aid. It cost me four thousand dollars, but its state of the art. It’s perfect.”
“Really,” answered the neighbor. “What kind is it?”
WAREHOUSE LINES FOR MORTGAGE BANKS
Communication is important, and is downright critical for any lender seeking warehouse lines. One article noted that $100 billion of warehouse capacity has been lost since last August. Regions, First Collateral, and WaMu are gone from warehouse operations. The number of competitors has gone down, the “haircuts” have gone up, the quality of collateral has improved, and the underwriting has tightened. ViewPoint Bank and Century Bank in Sarasota, FL are possibly opening up warehouse facilities. Southwest Securities has gained market share, and National City is still offering lines to select lenders. Some warehouse banks are structuring their deals as repurchase facilities, which do not appear on their balance sheets.
HOUSING BILL BACKLASH
A series of articles have appeared, pointing out the weaknesses in the just-passed Housing Bill. For example, although the conforming loan limits were temporarily raised earlier this year, with the increase set to expire at the end of this year, starting next year the limit will be $417,000 or 115% of the local median price, up to $625,500. No one has been able to say that the $729,750 will be around. Worth reading: MarketWatch and this summary.
US Bank’s correspondent division announced that “Effective Wednesday, July 30, 2008, for all new locks, U.S. Bank Home Mortgage Correspondent Lending Division is reducing the maximum TLTV on our Second Mortgage Products to a maximum TLTV of 85%. In the states of Arizona, California, Florida, Michigan and Nevada the new maximum TLTV is 75%.”
MERRILL SETS TONE FOR NEW WRITEDOWNS
Merrill Lynch will take a $5.7 billion third-quarter write-down as it unloads huge amounts of risky debt, and will raise $8.5 billion by selling new stock. As you may recall, this is about two weeks after they announced a $4.9 billion loss (including $9 billion of write-downs. Merrill has agreed to sell $30.6 billion of collateralized debt obligations (CDOs), a kind of repackaged debt, to an affiliate of private equity fund Lone Star Funds, for $6.7 billion, or about 22 cents on the dollar. Later on this morning we’ll see the May Case Shiller Home Price Index (Previous: -16.3%) and at 7AM PST the July Conference Board’s Consumer Confidence number (Previous: 50.4). We may see a continued flight to quality later this morning as the 10-yr heads back toward 4.00%.
JOKE OF THE DAY
A koala was sitting in a gum tree…… eating eucalyptus leaves when a little lizard walked past, looked up and said, “Hey Koala! What are you doing?”
The koala said, “Enjoying some leaves, come up and have some.”
So the little lizard climbed up and sat next to the koala where they enjoyed a few hallucinogenic eucalyptus leaves.
After a while the little lizard said that his mouth was “dry” and that he was going to get a drink from the river. The little lizard was so “stoned” that he leaned too far over and fell into the river. A crocodile saw this and swam over to the little lizard and helped him to the side.
Then he asked the little lizard, “What’s the matter with you?”
The little lizard explained to the crocodile that he was sitting eating funny leaves with the koala in the tree, got too intoxicated, and then fell into the river while taking a drink.
The crocodile said that he had to check this out and walked into the rain forest, found the tree where the koala was sitting eating more leaves. The crocodile looked up and said, “Hey you!”
So the koala looked down at him and said, “Wow dude…..How much water did you drink?!!”