Former NBA star Latrell Sprewell joined Michael Vick and Jose Canseco by giving up/losing his home according to the Milwaukee Journal Sentinel. Royal Bank of Scotland Group Plc unit RBS Citizens NA foreclosed on the property May 12, when Sprewell failed to show up in court to contest the proceedings. Sprewell once turned down a $21 million contract saying, “I’ve got a family to feed.”
MORTGAGE INDUSTRY NEWS ROUND-UP
Wachovia Corp. chief executive officer Ken Thompson will step down at the request of the bank’s board. Thompson has been with Wachovia for 32 years, and will be replaced by Landy Smith, the current chairman. In mid-April, Wachovia reported a first-quarter loss of $350 million – hurt, in part, by its ill-timed 2006 acquisition of California mortgage lender Golden West Financial Corp. (World). According to the press release, Wachovia said it was not a single incident that prompted Thompson’s exit but a “series of previously disclosed disappointments and setbacks” that have weighed on the company’s performance.
Did you know that FHA offers a program that allows a borrower to make energy efficient improvements to their home? Yup: existing one- and two-unit properties are eligible (not 3-4 units), and the cost of any improvement to the property that will increase the property’s energy efficiency and that is determined to be “cost effective” is eligible for financing into the mortgage. Its cost may be added to the mortgage amount up to the greater of: 5% of the property’s value (not to exceed $8,000); or $4,000. “Cost effective” means that the total cost of the improvements, including any maintenance costs, is less than the total present value of the energy saved over the useful life of the energy improvement.
Lehman Brothers released a report saying that “Although there has been a significant improvement in markets since the turmoil of March, conditions are still “far from normal.” The Fed’s actions to date have resulted in significantly lower borrowing costs for non-financial borrowers, but we think much of this is due to a rationing-out of lower quality borrowers. We expect the crunch to intensify and spread. Securitization markets are still impaired, and banks are in no shape to pick up the slack, in our view.” A sobering statement.
MARKET NEWS ROUND-UP
Rates this morning are about unchanged from Friday, with the 10-yr wallowing around 4.02% and mortgage prices a tad better. You may recall that on Friday, the Michigan Consumer Sentiment Index fell to a 28-year low, but the Chicago Purchasing Managers index rose to 49.1 in May, higher than forecast, from 48.3 in April. Although we have the unemployment data on Friday, it is relatively quiet this week economic news-wise. The Institute for Supply Management’s (ISM) manufacturing index comes out later this morning, and is a measure of manufacturer sentiment. Analysts are expecting to see a 48.0 reading in this month’s release, meaning that sentiment slipped slightly during May (a reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved). Tomorrow we have the Commerce Department’s release of April’s Factory Orders data, the revised 1st Quarter Productivity and Costs report will be released Wednesday morning along with the Institute for Supply Management’s services index. Thursday we have Jobless Claims, and then on Friday the Labor Department will post May’s Employment data. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately 52,000 jobs lost during the month.
JOKE OF THE DAY
A woman went to a walk-in clinic, where she was seen by a young, new doctor. After about three minutes in the examination room, the doctor told her she was pregnant.
She burst out, screaming as she ran down the hall.
An older doctor stopped her and asked what the problem was, and she told him what had happened. After listening, he had her sit down and relax in another exam room.
The doctor marched down the hallway back to where the first doctor was and demanded, “What’s the matter with you? Mrs. Terry is 59 years old, has four grown children and seven grandchildren, and you told her she was PREGNANT?!”
The young doctor continued to write on his clipboard, and without looking up, asked, “Does she still have the hiccups?”