this could be big – Effective Immediately – No Refi’s For Borrowers with Modified Loans – 1/5/09 – EFFECTIVE IMMEDIATELY – Modified Loans are Ineligible For Fannie/Freddie Refi’s. FHA MAY Be Eligible.  I have not verified this with the GSE’s personally. I have second-hand verification from the GSE’s and first-hand with three national Fannie/Freddie seller-servicers in the past week. … more at MR Mortgage 

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The potential deal between Citi and Morgan Stanley underscores the need for banks to find new ways to raise funds and maintain a competitive edge following a year in which a number of financial firms toppled under the weight of rising losses tied to bad mortgages. – AP Google

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Builders get reprieve on incentives – HUD delays implementation of rule change for 90 days – … agreed to delay for 90 days implementation of a rule change that would bar home builders from offering consumers incentives when they agree to use builders’ affiliated mortgage and title insurance companies. The new rule — one of many changes to the Real Estate Settlement Procedures Act (RESPA) being phased in by the end of the year — was set to take effect Jan. 16.  … – By Matt Carter – Inman News

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Bank of the United States – Citigroup cuts a deal with its new bosses on Capitol Hill. – … Since October, the government has invested $52 billion in Citi, while agreeing to eat up to $249 billion in losses on the bank’s toxic real estate portfolio. And so it’s really hard to say no when those Washington “investors” call for a favor – WSJ Opinion
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New Year Brings Higher Reverse Mortgage Margins – John Yedinak – Only a few days into 2009 and it’s clear that there is going to be some changes to the reverse mortgage business.  One of the biggest changes for the originator is the move to “live pricing”.  I covered the changes a couple weeks ago when Generation made the switch, but last week we saw … – Reverse Mortgage Daily

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1.  Government Finds Itself in Hole, Keeps Digging: Caroline Baum -  Bloomberg

2.  Dimon Says US Recession May Last 2 More Quarters – Elizabeth Hester -  … and unemployment may rise to the highest rate in a quarter century, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said … -   Bloomberg 

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FRB Atlanta – New Monetary Policy and the Economic Outlook – Atlanta Fed President and Chief Executive Officer Dennis Lockhart provides his 2009 economic outlook to the Rotary Club of Atlanta. 

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Oh, the joys of having the government as shareholder. Citigroup’s about-face on the Democrats’ mortgage cramdown bill will turn out to be costly and unwise. Tom Brown explains at bankstocks.com 
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OTTI Rules Tweaked or Sharpened? – By LINDA LOWELL – It appears a cranky FASB, responding to a flood of comments — some ill-informed, a bunch form letters — added a few teeth to what had been looking like a technical fix to other-than-temporary-impairment guidance for securitized assets.  -   housingwire 

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U.S. Mortgage Meltdown Linked To 2005 Bankruptcy Law  – Source: Kansas City Star – …Before Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, households could erase their unsecured debts by filing for Chapter 7 liquidation. That freed up income that distressed homeowners could use to make mortgage payments.  The new law, however, forced better-off households seeking bankruptcy protection to file under Chapter 13. That chapter requires homeowners to continue paying their unsecured lenders.  In other words, say the Fed researchers, cash-strapped homeowners who might have saved their homes by filing Chapter 7 are now much more likely to face foreclosure. …  – InsuranceNewsNet 

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Treasury yields – is this THE low? – Posted by Prieur du Plessis – This post is a guest contribution by Bennet Sedacca*, President of Atlantic Advisors Asset Management – Investment Postcards from Capetown 

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In this issue of The Institutional Risk Analyst, we discuss the departure of Robert Rubin from Citigroup as the bank seems headed for a government-managed, open bank resolution.  And we talk about why banks rated “F” or “D” in the IRA Bank Monitor may be good value, depending on your perspective.  – by Christopher Whalen