Jul. 10, 2007: Mortgages: several topics, including crafty realtors, and some humor

Jul. 10, 2007: Mortgages: several topics, including crafty realtors, and some humor Rob Chrisman

“Mortgage delinquency rates” include loans that are 30-60 days late through to loans in foreclosure. Wells Fargo, servicing $1.38 trillion, and Countrywide, servicing $1.35 trillion, have servicing delinquency rates of 3.94% and 4.98% respectively. How does that compare to those institutions servicing more of an Alt-A/subprime loan mix? Indy Mac’s delinquency rate is 7.9%, Litton Loan Servicing has 16.0%, Equity One has 10.6%, and Ocwen has 24.4%. Bank of America’s is only 1.6%.

Although the yield on the 10-yr is back down to 5.11% with no news due out today, things could become a little more interesting later today as Fed Chairman speaks on the continued threat of inflation to the economy. Generally speaking, surprises are what jolt the markets, so although inflationary expectations are already set, any deviation from what analysts expect him to say could move rates. Few analysts believe that rates are going lower this year. Weakness in the economy will push the 10-yr back below 5.0% and trigger the Fed to lower rates but most do not see this happening since other nations’ economies are healthy and ultimately benefiting us despite our housing woes, inflation worries, and economic slowdown.

Does the National Association of Realtors manipulate sales data to skew their numbers? Possibly. In South Florida (Naples) local realtors are refusing to submit ALL THE DATA to their regional Board of Realtors, because doing so would dilute the nicer parts of town with lower-priced and worse-performing neighbors: “The Naples Area Board of Realtors has refused to submit its sales and price numbers to the Florida Association of Realtors for its comprehensive monthly reports.” Realtors have been accused of playing with their data. Besides this, some have been accused of pulling a slow selling house off of Multiple Listing, and then re-listing it with a different MLS number and at a lower price. That makes the overall time-to-sell appear much better than it really is, and improves the “Percentage of asking price received” number.

A lawyer and a blonde are sitting next to each other on a long flight from LA to NY. The lawyer leans over to her and asks if she would like to play a fun game. The blonde just wants to take a nap, so she politely declines and rolls over to the window to catch a few winks. The lawyer persists and explains that the game is really easy and a lot of fun. He explains “I ask you a question, and if you don’t know the answer, you pay me $5, and visa-versa.” Again, she politely declines and tries to get some sleep. The lawyer, now somewhat agitated, says, “Okay, if you don’t know the answer you pay me $5, and if I don’t know the answer, I will pay you $50!” figuring that since she is a blonde that he will easily win the match. This catches the blonde’s attention and, figuring that there will be no end to this torment unless she plays, agrees to the game. The lawyer asks the first question. “What’s the distance from the earth to the moon?” The blonde doesn’t say a word, reaches in to her purse, pulls out a five-dollar bill and hands it to the lawyer. Now, it’s the blonde’s turn. She asks the lawyer: “What goes up a hill with three legs, and comes down with four?” The lawyer looks at her with a puzzled look. He takes out his laptop computer and searches all his references. He taps into the Airphone with his modem and searches the Net and the Library of Congress. Frustrated, he sends E-mails to all his coworkers and friends he knows, all to no avail. After over an hour, he wakes the blonde and hands her $50. The blonde politely takes the $50 and turns away to get back to sleep. The lawyer, who is more than a little miffed, wakes the blonde and asks, “Well, so what is the answer!?” Without a word, the blonde reaches into her purse, hands the lawyer $5, and goes back to sleep.