Richard's Blog

Market Update

DSF Mortgages — Fri, 25 Jul 2008 15:26:52 -0500

Market Outlook

Friday, July 25, 2008

Price Trend: Negative

Price Volatility: Very High

Recommendation: Floating with an eye on the Market

_________________________________________________________________

Current Conditions: Today's Economic Data (all times PST)

FNMA 6.0 99-31 (-13) Durable Goods 5:30

GNMA 6.0 100-20 (-13) New Home Sales 7:00

10yr Yield 4.062% Consumer Sentiment 7:00

_________________________________________________________________

Commentary:

None of the data released this morning was good for bonds. New Home Sales fell less than expected. Durable Goods orders were up and the previous month's data was revised upwardly. Finally, Consumer Sentiment (as measured by the University of Michigan) actually improved. Oil is also down this morning which is helping stocks remain in positive territory. Mortgages are priced right about where they were yesterday morning having given up their afternoon gains.

Date	ET	Release	For	Actual	Briefing.com	Consensus	Prior	Revised From
Jul 25	08:30	Durable Orders	Jun	0.8%	0.0%	-0.3%	0.0%
Jul 25	10:00	Mich Sentiment-Rev.	Jul	61.2	NA	56.4	56.6
Jul 25	10:00	New Home Sales	Jun	530K	507K	505K	512K

Housing Rescue Bill Passes Key Senate Test

DSF Mortgages — Fri, 25 Jul 2008 12:39:39 -0500

Housing Rescue Bill Passes Key Senate Test

Vote To Speed Up Work On $300 Billion Mortgage Aid Plan Gets Broad Bipartisan Support

WASHINGTON, June 24, 2008

AP) A massive foreclosure rescue bill overwhelmingly cleared a key Senate test Tuesday, drawing broad support from Democrats and Republicans alike.

The Senate voted 83-9 to speed up work on the $300 billion mortgage aid plan, putting it on track for a final vote as early as the end of the day.

The resounding vote reflected a keen interest in both parties in claiming election-year credit for helping homeowners amid tough economic times.

Still, the measure faces a veto threat from President Bush and disputes among Democrats about key details. Those challenges will probably delay any final deal until mid-July.

Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said the legislation "would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country."

"What better gift on independence could we give the American people than a sense that this, their Congress of the United States, can come together, despite political differences, and craft legislation to make a difference for our country," Dodd said.

Senate passage would set the stage for high-stakes negotiations to resolve Democrats' differences. Conservative Democrats known as "Blue Dogs" are concerned about how to pay for the measure, while members of the Congressional Black Caucus - most of them liberal - call it "unacceptable," arguing it doesn't do enough to address the needs of African Americans.

Leaders also are divided on how high to place loan limits that apply to government mortgage insurance and financing.

The centerpiece of the package is a foreclosure rescue program in which the Federal Housing Administration would provide $300 billion in new, cheaper mortgages for distressed homeowners who otherwise would be considered too financially risky to qualify for government-insured, fixed-rate loans.

Borrowers would be eligible for the housing rescue if their mortgage holders were willing to take a substantial loss and allow them to refinance, and would ultimately have to share with the government a portion of any profits they made from selling or refinancing their properties.

The measure was advancing as a widely watched housing index said U.S. home prices fell in April at their steepest rate since the index began in 2000. The Standard & Poor's/Case-Shiller home price index of 20 cities fell by 15.3 percent in April versus a year ago, according to Tuesday's report.

A separate report from the Office of Federal Housing Enterprise Oversight said U.S. home prices fell 4.6 percent in April from the same month last year, when the index peaked. The government index is calculated using mortgage loans of $417,000 or less.

The bill would tighten controls and create a new regulator for Fannie Mae and Freddie Mac, which provide huge amounts of cash flow to the mortgage market by buying home loans from banks.

It also would provide a $14.5 billion array of tax breaks, including a credit of up to $8,000 for first-time homebuyers who buy a home in the next year and boosts in low-income tax credits and mortgage revenue bonds.

In a letter to Democratic leaders last week, the 42 House members of the Black Caucus said the bill is plagued with "glaring omissions," including affordable housing funds for states affected by Hurricane Katrina and grants for states and localities to buy and fix up foreclosed properties.

To draw GOP support, Senate Democrats diverted the affordable housing money to pay for the foreclosure aid program.

The Senate bill provides $3.9 billion in grants to deal with foreclosed properties - compared with a House plan providing $15 billion - but the White House singled out the funds in its veto threat, and Blue Dogs are demanding that the money be offset with cuts elsewhere.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, said he'd be willing to yank the money and add it to a separate measure in the interests of a deal.

Positive Thoughts, Positive Results!

Market Update

DSF Mortgages — Fri, 25 Jul 2008 11:18:15 -0500

Market Outlook

Friday, July 25, 2008

Price Trend: Positive

Price Volatility: Very High

Recommendation: Floating

_________________________________________________________________

Current Conditions: Today's Economic Data (all times PST)

FNMA 6.0 100-01 (+9) Jobless Claims 5:30 GNMA 6.0 100-22 (+6) Existing Home Sales 7:00

10yr Yield 4.054%

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Commentary:

Bonds are continuing their rally that began late yesterday. This morning's data was quite weak and stocks are also down which is helping matters for bonds. Existing Home Sales posted their worst pace in 10 years.

Later today the Treasury will be auctioning 5yr notes. This can have an impact on bond prices depending on how well the issuance is received.

This Week's Calendar

Date	ET	Release	For	Actual	Briefing.com	Consensus	Prior	Revised From
Jul 24	08:30	Initial Claims	07/19	406K	372K	380K	366K
Jul 24	10:00	Existing Home Sales	Jun	4.86M	4.97M	4.95M	4.99M
Jul 25	08:30	Durable Orders	Jun		0.0%	-0.3%	0.0%
Jul 25	10:00	Mich Sentiment-Rev.	Jul		NA	56.4	56.6
Jul 25	10:00	New Home Sales	Jun		507K	505K	512K

Mortgage program highlights

DSF Mortgages — Wed, 23 Jul 2008 12:04:02 -0500

AGENCY CONFORMING UP TO $417,000

Purchase/Rate Term 95% LTV with 680 FICO
Purchase/Rate Term 95% LTV Second Home with 680 FICO
Purchase/Rate Term 90% LTV Investment with 660 FICO

EA Levels l & ll UP TO $417,000

Purchase/Rate Term 95% LTV with 680 FICO
Purchase/Rate Term 95% LTV Second Home with 680 FICO

JUMBO CONFORMING UP TO $729,750

Purchase/Rate Term 90% LTV with 700 FICO
Limited/Cash Out 90% LTV with 700 FICO
Purchase 60% LTV Second Home/Investment with 660 FICO

Verbal Verification Only Program up to $417,000

Purchase/Rate Term 90% LTV
Cash Out 80% LTV
Product is Risk-based
Must Receive 7.0 DO/DU FINDINGS
No Rental Income Allowed
Typically 700+
Typically W-2 vs. Self-Employed

FHA Program & Features

Available products:

30-year Fixed
3/1 ARM
FHA 95% Cash-Out / 85% on loans over $417,000
FHA Streamline
FHASecure

Features:

Owner Occupied properties
Property types: 1, 2, 3 and 4 unit properties
Condominiums
Full Documentation
3% down payment required
No cash reserve requirement for 1 and 2 unit properties
Ratios: 31/43
Up to 6% seller contribution
Cash out Refinance available up to 95%

Asset-Based Financing

Bridge No FICO

1st and 2nd Trust Deeds or Cross-Collateralization (Multi-State Available) up to 65% LTV/CLTV with no prepayment penalty. All loans are up to a 1 Year Term Interest Only payment that adjusts monthly over the index. Programs are available for Multi-Family (Stabilized/Unstabilized), Mixed Use, Office, Retail, Industrial, Light Industrial, Hospitality (Flagged/Unflagged), Construction Completion-SFR, Warehouse, Self-Storage, B&B, Qualifying Mobile Home Parks, Automotive, Entitled Land or Special Use Properties.

Direct Portfolio Lender
Flexible & Common Sense Underwriting
No Appraisal Required
Trust, LLC, LLP & Corp Financing
Stated Programs Available
Loan Amounts $200K - $100M+
No Fico Minimum
Current NOD/NOS/BK = OK
Unlimited Mortgage Lates/Cash-Out OK
Funding As Quickly As 3 Days
Commercial Hard Money
RATES AS LOW AS 10.25%
FEES STARTING AT 2.50 PTS
NO PREPAY

This Buds not for you!

DSF Mortgages — Wed, 23 Jul 2008 12:00:15 -0500

The Budweiser Story

(not a joke)

This is TRUE!

How Budweiser handled those who laughed at those

who died on the 11th of September,
2001 ..

Thought you might like to know what happened

in a little town north of Bakersfield , California ..

After you finish reading this,

please forward this story on to others

so that our nation and people around the world

will know about those who laughed

when they found out about the tragic events

in New York , Pennsylvania , and the Pentagon.

On September 11th,

A Budweiser employee was making a delivery

to a convenience store in a California town

named McFarland.

He knew of the tragedy that had occurred

in New York when he entered the business

to find the two Arabs, who owned the business, whooping and hollering to show their approval

and support of this treacherous attack.

The Budweiser employee went to his truck,

called his boss and told him

of the very upsetting event!

He didn't feel he could be in that store with those

horrible people. His boss asked him,

'Do you think you could go in there long enough

to pull every Budweiser product and item

our beverage company sells there?

We'll never deliver to them again.'

The employee walked in,

proceeded to pull every single product his

beverage company provided and left

with an incredible grin on his face.

He told them never to bother to call for

a delivery again.

Budweiser happens to be the beer of choice

for that community.

Just letting you know how Kern County

handled this situation. And Now

The Rest Of The Story:

It seems that the Bud driver and the Pepsi man

are neighbors. Bud called Pepsi and told him.

Pepsi called his boss who told him to

pull all Pepsi products as well!!!

That would include Frito Lay, etc.

Furthermore, word spread and

all vendors followed suit! At last report,

the store was closed indefinitely.

Good old American

Passive-Aggressive A$$ Whoopin!

Pass this along, America needs to know

that we're all working together!

If you can read this.

Thank a teacher...

If you are reading it in English...

THANK A SOLDIER!!!

Fannie Faeddies 25 billion bailout.

DSF Mortgages — Wed, 23 Jul 2008 11:42:40 -0500

I am curious: what expertise does the CBO have in developing an independent view of the two GSE's exposures? The CBO was no doubt dependent on the GSEs and/or the Treasury for key elements of the analysis.

Moreover, if you connect the dots suggested in the Bloomberg story, the analysis was likely done on a probabilistic basis, with a key assumption that there were 50% odds the facility would not be used before it expired at the end of 2009. Thus, if the cost is estimated at $25 billion, presumably the odds that it will be used are 50% with the damage in that scenario $50 billion (or more refined scenarios, say 10% odds of a cost of $10 billion, 20% odds of a cost of $30 billion, 20% odds of a cost of $90 billion).

Do you really think this facility will not be renewed? 2010 is the big year for Alt-A and Option ARM resets. The housing market is unlikely to be out of the woods. Looking at this plan only through the end or 2009 is a garbage-in, garbage-out analysis (or more accurately, the plan is fraud in pretending to provide support only a year and a few months). Once the Federal government commits to standing behind the GSEs (which appears inescapable), there is no wrigglig off that hook.

From Bloomberg:

Treasury Secretary Henry Paulson's rescue package for Fannie Mae and Freddie Mac would probably cost taxpayers $25 billion, the Congressional Budget Office said.

``There is a significant chance -- probably better than 50 percent -- that the proposed new Treasury authority would not be used before it expired at the end of December 2009,'' the nonpartisan agency, which provides economic and budget analysis for lawmakers, said in a report today....

The cost of the plan will depend upon terms of the credit, whether the companies have to put up collateral, pay fees or commit a portion of profit to the Treasury, said Marvin Phaup, a CBO economist for almost 20 years who retired in 2007 and is now a research scholar at George Washington University in Washington.

``This is a very very difficult thing to do and of course the political pressure will be great to make the cost estimate zero,'' Phaup said in a telephone interview last week. ``You can make a reasoned argument that it will be zero with some probability, but of course, it's also with some probability it could be very costly to taxpayers.''...

At the end of March Freddie Mac had $6 billion more than the minimum capital required by its regulator, and Fannie Mae had surplus capital of $5.1 billion. The companies already raised $20 billion in the past year to cover losses and meet Ofheo rules.

Freddie Mac will probably report a surplus exceeding the minimum 20 percent required for the second quarter, according to a company filing with the SEC last week. The SEC registration and equity raising will allow the company to reduce its capital surplus level to 10 percent.

Market Update

DSF Mortgages — Wed, 23 Jul 2008 11:09:41 -0500

Market Outlook

Wednesday, July 23, 2008

Price Trend: Neutral

Price Volatility: Very High

Recommendation: Floating with an eye on the Market

_________________________________________________________________

Current Conditions: Today's Economic Data (all times PST)

FNMA 6.0 99-12 (+2) Fed Beige Book 11:00

GNMA 6.0 100-02 (-1)

10yr Yield 4.170%

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Commentary:

The only data on the calendar today is the release of the Fed's Beige Book later this morning. Mortgages have continued to tighten in to Treasuries this morning on news that Congress has come to an agreement on their housing reform bill. There was some concern that the President would veto the bill if it included funds to be given to local governments for maintenance of foreclosed properties. The bill apparently does include those funds ($4bln) but the President has relented on his veto threat.

The rest of the week is slow as far as data goes. Stocks will continue to give direction to bonds as earnings season continues.

This Week's Calendar

Date	ET	Release	For	Actual	Briefing.com	Consensus	Prior	Revised From
Jul 23	10:35	Crude Inventories	07/19	-1558K	NA	NA	2952K
Jul 23	14:00	Fed's Beige Book
Jul 24	08:30	Initial Claims	07/19		372K	380K	366K
Jul 24	10:00	Existing Home Sales	Jun		4.97M	4.95M	4.99M
Jul 25	08:30	Durable Orders	Jun		0.0%	-0.3%	0.0%
Jul 25	10:00	Mich Sentiment-Rev.	Jul		NA	56.4	56.6
Jul 25	10:00	New Home Sales	Jun		507K	505K	512K

Market Update

DSF Mortgages — Wed, 16 Jul 2008 12:56:06 -0500

Market Outlook

Wednesday, July 16, 2008

Price Trend: Negative

Price Volatility: Very High

Recommendation: Consider Locking

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Current Conditions: Today’s Economic Data (all times PST)

FNMA 6.0 100-22 (-15) CPI 5:30

GNMA 6.0 101-14 (-15) Industrial Production 6:15

10yr Yield 3.942% NAHB Housing Market Index 10:00 FOMC Minutes 11:00

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Commentary:

Bonds are taking a little bit of a beating this morning as data released today indicates that the Fed does indeed need to be concerned about inflation. Headline CPI increased buy the largest amount since 1982. The 1.1% increase was significantly more than expected. The Core number (excluding food and energy) also increased more than expected at 0.3%. That puts core inflation at 2.4% for the past 12 months. Normally this would lead to rate increases from the Fed but the economy is struggling so that option is likely off the table. The Fed is in a precarious position right now.

Industrial Production increased more than expected in June. The increase was because of exports almost entirely. Companies who are relying on the domestic market are definitely struggling.

Ben Bernanke will be in the House today for the second part of his semiannual report to Congress. The prepared remarks will be the same. The question and answer period will be what the market watches.

This Week's Calendar

Date	ET	Release	For	Actual	Briefing.com	Consensus	Prior	Bond Impact
Jul 16	08:30	Core CPI	Jun	0.3%	0.2%	0.2%	0.2%	Moderate-High
Jul 16	08:30	CPI	Jun	1.1%	0.7%	0.7%	0.6%	Moderate-High
Jul 16	09:00	Net Foreign Purchases	May		NA	$65.0B	$115.1B	Low
Jul 16	09:15	Capacity Utilization	Jun	79.9%	79.4%	79.4%	79.4%	Low
Jul 16	09:15	Industrial Production	Jun	0.5%	0.2%	0.0%	-0.2%	Low
Jul 16	10:35	Crude Inventories	07/12		NA	NA	-5840K	Low
Jul 16	14:00	FOMC Minutes	Jun 25					Moderate
Jul 17	08:30	Building Permits	Jun		980K	965K	969K	Low
Jul 17	08:30	Housing Starts	Jun		985K	960K	975K	Low
Jul 17	08:30	Initial Claims	07/12		NA	380K	346K	Low
Jul 17	10:00	Philadelphia Fed	Jul		-15	-15.0	-17.1	Low-Moderate