Aug. 24, 2007: Mortgage mumblings

What one loan agent said: “If you take away stated loans, this market HAS TO DROP at least 50%…..here is why….plain and simple….income has gone up 4% per year at the same time housing has gone up 125%.” Speaking of which, government data indicates that Americans earned a smaller average income in 2005 than in 2000. While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1% less than in 2000, after adjusting for inflation, an analysis of new tax statistics show. Total adjusted gross income in 2005 was $7.43 trillion for all Americans. The White House said the fact that average incomes were smaller five years after the Internet bubble burst “should not surprise anyone.”

Yesterday both Countrywide CEO Angelo Mozilo and Thornburg’s president Larry Goldstone told CNBC they fear a recession. But the economic news out this morning does not support that: Durable Goods was +5.9%, much stronger than expected. The 10-yr stands at 4.64% and A-paper prices are roughly unchanged.

Company news? Once again, there is plenty, along with a rumor or two:

On Tuesday 1st National Bank of Arizona (FNBA) announced that they suspended wholesale and correspondent originations and will focus on retail. And don’t even try for an extension. Mortgage Investors Group (MIG), another wholesale company, has closed their doors. Their description said, “Success depends on your ability to move loans through the complex mortgage process in a timely and efficient manner. The wholesale lender you choose to work with can make all the difference in your ability to be successful in today’s ever-changing mortgage marketplace.”

It is rumored that BofA has eliminated their entire line of stated product. I don’t have confirmation of this.

Amstar Mortgage agreed to “relinquish managerial control” of its 116 branches in 31 states to the Money Store, which will offer jobs to the employees.

CSFB said that their existing Prime A product will be replaced with a new Prime A eligibility matrix with loans to $6 million, but also further tightened their Alt-A guidelines.

One veteran’s opinion of the current housing situation: “You know how to solve the foreclosure issue and all these homes lying idle and dumped on the market? You give ’em to every combat veteran returning home from Iraq and Afghanistan….You have all these foreclosed homes just sitting around. A credit crunch on potential buyers who aren’t buying these properties anyway. I (he) says, give these returning Vets and their families these homes. The Federal government is going to have to unravel all this mess because its too important…Between the Defense Dept., the Veterans Administration, The GOA, the FDIC, HUD and any other initials you want to throw in there, new notes can be written on these properties and guaranteed by the government. Expand the VA loan limits to cover the housing cost what ever and where ever it is. Stream line the process. Eliminate the surplus inventory. Tie it to Veterans benefits.”

INDICATORS THAT YOUR EMPLOYER HAS CHANGED TO A CHEAPER HEALTH CARE PLAN:

Directions to your Doctor’s office include “Take a left when you enter the trailer park.”

The tongue depressors taste faintly of Fudgesicles.

The only proctologist in the plan is “Gus” from Roto-Rooter..

The only item listed under Preventative Care Coverage is “An apple a day.”

Your primary care physician is wearing the pants you gave to Goodwill last month.

“The patient is responsible for 200% of out-of-network charges; this is not a typographical error.

The only expense covered 100% is “embalming.”

Your Prozac comes in different colors with little M’s on them.

AND THE NUMBER ONE SIGN YOU’VE JOINED A VERY CHEAP HEALTH CARE PLAN:

You ask for Viagra, and they give you a Popsicle stick and duct tape.