Q: In these busy market times, how can you get the attention of your broker? A: Say, "Hey, waiter!" To tell us how the economy is doing, should we really look at the stock market? Probably not, as many experts believe that prices are more impacted by psychology than by fundamental items such as earnings – in spite of what reporters say. So although the markets have been rallying, and the majority of company’s earnings reports beating expectations, they are still paying a price. Companies are beating estimates due to cost cutting measures instead of growing revenue. In fact, of the companies recently reporting earnings, almost 75% reported year-over-year declines in revenue which does not bode well for economic fundamentals such as employment and ultimately for consumer spending. Have you ever heard of Bayview Mortgage Capital? Me neither, until I read a report saying that they are a “newly formed” mortgage company, with their parent (Bayview, out of Florida) being owned by the Blackstone Group, and that they filed for a $500 million IPO (initial public offering). Per the report, they will be using the money to possibly qualify as a REIT and/or to use the money to buy distressed real estate loans from banks and other lenders and investors. “According to a filing with the U.S. Securities and Exchange Commission, the new company plans to use the real estate investment trust (REIT) tax structure…The company plans to buy and manage residential and commercial mortgage loans, mortgage-backed securities, real estate-related securities, real estate, and various other forms of real estate investment it believes are undervalued.” Reading glasses required? I apologize for mis-typing the phone number of BOM for scratched and dented loans. It should be 877-307-2662, not 307-2664. WSFS Financial, out of Delaware, is backing out of its joint venture in the reverse mortgage field. Early last year WSFS acquired a majority interest in 1st Reverse Financial Services, but in their press release believe that it is unlikely that they will make a profit, and are therefore withdrawing from the venture. On the other hand, Security One Bank and Texas Capital Bank have agreed to double the size of its existing warehousing facility for reverse mortgages. In fact, according to the statement, Security One Lending has doubled its business since early March after it acquired OMNI Reverse Mortgage. What is Flagstar’s current stance on the “government-offered, investor-disinterested” $8,000 tax credit for first time home buyers? (ARRA provides a tax credit of up to $8000.00 to first-time homebuyers who purchase a home on or before November 30, 2009. Government entities and FHA-approved non-profit agencies that are considered instrumentalities of government may provide tax credit advances with a second lien.  The tax credit advance may be used to make the down payment and pay closing costs, discount points and pre-paid expenses.)  Flagstar will allow tax credit advances with second liens from eligible governmental agencies and instrumentalities of government as long as the organization is also on Flagstar’s list of eligible community second programs.” Check out this website to make certain a non-profit agency is both FHA-approved and an instrumentality of government, refer to the appropriate homeownership center’s list of approved non-profit agencies: http://www.hud.gov/offices/hsg/sfh/np/np_hoc.cfm Freddie Mac sent out a bulletin “providing detailed requirements for recently previewed and new changes for Relief Refinance Mortgages with LTV ratios greater than 105 percent and less than or equal to 125 percent, including expanding the reduced term incentive to cover a broader range of shorter term mortgages, expanding sale options for Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 105 percent to provide added flexibility for Seller/Servicers that traditionally sell mortgages through our servicing-released sales process, and expanding the Number of Units delivery fee grid and adding new delivery fee rates for eligible mortgages secured by 3- to 4-unit properties to reflect the higher LTV ratios permitted for Relief Refinance Mortgages.” Any originator interested in funding these loans had best refer to Freddie’s updated guidelines for accurate delivery instructions, since one wouldn’t want to make a mistake with a 125% LTV loan! U. S. Bank’s Wholesale Division clarified the determination of the LTV to be used to calculate the monthly MIP for FHA Streamline Refinance transactions without appraisals. Specifically, the LTV for “FHA Streamline Refinance transactions, without an appraisal, must be calculated by dividing the new base loan amount (before adding the UFMIP) by the original property value. The Refinance Authorization, provided by the FHA Connection, provides the original property value to be used for calculating the LTV.” And “To ensure correct TIL disclosure, the LTV for FHA Streamline Refinance transactions, without an appraisal, must be calculated using the original property value and original mortgage amount from the previous FHA transaction.” How about that New Home Sales number yesterday: up 11% in June, the biggest jump in eight years. Don’t worry about the fact that the median price decreased 12% in the last year, and that sales are down 21% from last June. Midwest sales were up 43%, but here in the South (I am in the Carolinas, GA, and AL for the next several days) sales were down 5%. Nationwide, it would take 8.8 months to sell all homes at the current sales pace, the lowest level since October 2007. We also had Deutsche Deutsche Bank post a better-than-forecast rise in net profit, although it sharply increased their provisions for bad loans. Deutsche is Germany's largest bank by market capitalization, and their net profit shot up 68% versus their numbers a year ago. We got through the 20-yr TIPS auction yesterday, but today have $42 billion of 2-yr notes to sell later today. Obviously this supply pressure is not helping mortgage rates & prices, and yesterday things got a little worse. For news today we’ll see Consumer Confidence and the Case/Shiller Home Price Index, and of course the auction. >From what I have heard, no one expects rates to move up too much or down too much, so aside from a little intra-week volatility, perhaps mortgage rates will be at these levels for quite some time. Currently the yield on the 10-yr is around 3.70%, and mortgage security prices are a tad better. Today's joke: [Warning: R-rated.]  can be found at http://www.robchrisman.com/ Rob (For archived commentaries, check www.robchrisman.com, or to subscribe/unsubscibe write to rchrisman@robchrisman.com. The commentary is produced every business day, but there always seem to be vague e-mail “issues”, so if you don’t receive it, let me know.)