Any of our agents who locked in borrowers prior to the last few days is feeling pretty good. Especially with the 10-yr hitting 3.95% this morning, and mortgage prices worse by another .250. Haven’t you heard? We’re done with the worst of it, the economy is going to pick up speed and great times are ahead! Can we really forget that foreclosure filings for April rose 65% on a year-to-year basis and 4% from March? According to RealtyTrac, there were foreclosure filings on 243,353 properties last month. Nevada had the nation’s highest state rate last month. The highest total foreclosure-filing belongs to California, with 64,683 properties, followed by Florida, Ohio, Arizona and Texas. Merced, Calif., led tracked metropolitan areas in filing rates, trailed by Stockton, Modesto and Riverside-San Bernardino, Calif.; and Cape Coral-Fort Myers, Florida.

This morning we had April’s Consumer Price Index. Expected +.3%, prices only rose 0.2%. Core prices, which exclude volatile food and energy, were up just 0.1%, half the increase analysts had forecast, but energy prices are up 15.9% percent from the same time a year ago. (Later we have the Atlanta and Boston Fed presidents speaking.) Yesterday’s data was really a double-whammy of higher growth and higher inflation, and that’s pushing yields up and leading to a flattening of the curve. Oil reached $126.98 a barrel, a record high. There is a 92% chance the Fed will hold its target lending rate at 2% into the summer, and traders also see a 43% chance the central bank will increase overnight funds to 2.25% by year-end.

First Horizon National Corp. is reportedly considering the sale or elimination of its mortgage business that could happen in the next three to four months, according to a report from Morgan Keegan & Co. Monday. First Horizon’s mortgage business employs more than 3,600 people in 250 locations, and the reduction would impact 230 branches and 2,200 employees. The company has about $4 billion in mortgage loans on the books. Check out the bizjournals article

Last week the House passed legislation that aims to refinance troubled mortgages and increase demand among first-time homebuyers. The President has threatened a veto, and the position of the Senate is unclear.  But, regardless, at some point federal intervention still appears likely. The policy differences aren’t as large as rhetoric implies, and enactment of some type of legislation could slightly help the decline in home prices by reducing the number of foreclosures and increasing demand among first-time homebuyers – at a cost to taxpayers.

There is no agreement on the bill yet as several Republicans view the plans as a bailout for lenders, speculators and irresponsible homeowners. The program involves giving struggling homeowners a new mortgage backed by the FHA. The Democrats believe that it would cost much less compared to the potential government exposure with the Fed’s guarantee in the Bear Stearns case, and as mentioned above the president may veto it. On top of Congressional differences, lies the threat of a White House veto of the bill, asking the question, “Why should the taxpayer, through the program, provide a guarantee of principal if lenders agree to reduce the principal of a borrower’s current mortgage?” This is a volunteer program by which a mortgage company would be required to write-down the value of a delinquent loan by 15% of the home’s current appraised value for borrowers who are 60 days late on