Todays Mortgage and Economic News and Trends 8/3
Article by Christian Amstadter
I heard an esteemed commentator talking about the government paying private parties to carry out certain tasks. She was asking, “Is it really indicative of where we are as a society that someone can receive a credit of ,500 for a car, but a mortgage servicer will only receive ,000 to modify a mortgage?” This is obviously a complicated question, but it does raise some questions. I am waiting for them to offer a “clunker rebate” for my old television, and why not electric toothbrushes?
With all this talk about the end of the recession, it is easy to lose sight of the number of bank failures this year. Friday afternoon another five banks were shut down, so now the total is 69 for all of 2009 with 5 more months to go. The shut-downs have cost the FDIC, and us, over billion this year, compared to about billion for all of 2008. Gone are First State Bank of Altus, Oklahoma (folded into Herring Bank Texas), Integrity Bank of Florida (taken over by Stonegate Bank), Peoples Community Bank of Ohio (taken over by First Financial Bank), First Bank Americano (New Jersey, taken over by Crown Bank), and in Illinois Mutual Bank was taken over by United Central Bank.
I am in no way an expert on the Canadian mortgage market, or even the one here in the US for that matter, other than I now know that Wells Fargo offered residential mortgages and home equity loans in that country. That came to an end, as Wells’ Canadian unit stopped accepting applications for the loans last week (through its HomePlan broker network). Wells Fargo, who has a 20% market share here in the US, said, “In response to recent analysis of our operations and the current market environment, at this time, we made the decision to stop originating consumer real-estate loans products in Canada.” Wells apparently does about billion a year up there, as opposed to about 0-500 billion a year here in the US.
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We had a nice rally in the bond market at the end of last week. Although it is difficult to put one’s finger on why, possible reasons include a weak GDP number, some relief that the auctions were over with (and none this week), etc. The dollar has been sliding, and oil is back on the march higher, but it didn’t seem to hurt interest rates. This seems to have turned around a little here this morning, after stock markets rallied overseas and there is some profit taking (selling) in our bond market. Even HSBC and Barclays posted a first half profit. Investor news has been light as the end of summer is nearing.
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What’s ahead of us for economic news this week? It will be relatively busy: today we have Construction Spending and the ISM Index number, tomorrow we have Personal Income and Consumption, Wednesday we’ll see Factory Orders and the ISM Services number, Thursday our buddy Jobless Claims, and then on Friday we have all of the Unemployment data. So once again, given the rally late last week it is not surprising to find the mortgage prices giving a little back today: mortgage security prices are worse by about.250 versus Friday afternoon, and the yield on the 10-yr is 3.58%.
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Morris and his wife Esther went to the state fair every year,
And every year Morris would say,
‘Esther,I’d like to ride in that helicopter.’
Esther always replied,
‘I know Morris, but that helicopter ride is fifty dollars,
And fifty dollars is fifty dollars’
One year Esther and Morris went to the fair, and Morris said,
‘Esther, I’m 85 years old.
If I don’t ride that helicopter, I might never get another chance.’
To this, Esther replied,
‘Morris that helicopter ride is fifty dollars, and fifty dollars is fifty dollars.’
The pilot overheard the couple and said,
‘Folks I’ll make you a deal. I’ll take the both of you for a ride. If you can stay quiet for the entire ride and don’t say a word I won’t charge you a penny!
But if you say one word it’s fifty dollars.’
Morris and Esther agreed and up they went.
The pilot did all kinds of fancy maneuvers, but not a word was heard.
He did his daredevil tricks over and over again,
But still not a word.
When they landed, the pilot turned to Morris and said,
‘By golly, I did everything I could to get you to yell out, but you didn’t.
I’m impressed!’
Morris replied,
‘Well, to tell you the truth,
I almost said something when Esther fell out,
But you know,
fifty dollars is fifty dollars!’
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