If you hedge servicing, read this paper.  If someone in your organization hedges servicing, forward this to them to read.  Andy Kalotay and Qi Fu have been very kind to share their work.  You are welcome to contact them.        Due to FAS 157 reporting requirements, the valuation of mortgage servicing rights directly affects [...]

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“People need good lies. There are too many bad ones.” So chimed in Kurt Vonnegut. Many foreign investors feel cheated by the rating agencies, who gave their triple-A stamp to various mortgage securities that turned out to be anything but triple-A. Are “covered bonds” the answer? Touted as a new way for banks to come [...]

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    check out the chart - Merrill Write-Downs to Date… I searched all over the web, but was unable to find a cumulative total of write-downs to date for Merrill Lynch. Below is my attempt to piece together what I calculated at ~$40B in write-downs to date. For comparison’s sake, Merrill’s equity market cap at [...]

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   Part 1 had 9 links - here are 7 more  links David Merkel has an excellent piece - save this link as a reference - Covering Covered Bonds - Aleph Blog ———— Paulson’s Covered Bond Proposal - Many people are asking about Treasury Secretary Paulson’s Covered Bond Plan. - MISH’S Global Economic Trend Analysis  [...]

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   has a list - Financial Stocks: What Could Go Right  - Quite a bit, actually - Thomas Brown -   bankstocks.com ———— Fund manager Einhorn awaits further price falls for distressed debt - Aline van Duyn - … We’re not there yet,” Mr Einhorn said in a video interview with the Financial Times. “We have [...]

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“Keep skunks and bankers at a distance.” So the saying goes. Hopefully that pertains to bankers and not mortgage bankers, not that bankers are bad! Speaking of mortgage bankers, the attached letter from the MBAA detailing the key points of the new Housing Bill will hopefully answer many questions that originators have. Fallout is a) [...]

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   Want to learn about covered bonds?  Read on …    Treasury Holds Mortgage Finance Press Conference - Secretary Henry M. Paulson, Jr. was joined by financial regulators and future covered bond issuers to announce best practices for the development of a covered bond market in the United States. - US Treasury ———— A New [...]

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  To Our Clients, Colleagues and Friends: · Would you rather do 50 loans with a margin of 100 bps or 100 loans with a margin of 75 bps?  While the answer is obvious, we see companies who have huge margins, but who just don’t do a lot of volume. We also see companies that [...]

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   posted by Bill Coppedge   PIMCO’s July 2008 Global Central Bank Focus, “The Paradox of Deleveraging” by Paul McCulley, is now available at PIMCO ————    Credit Default Swaps On WaMu, Others - In response to Uninsured Depositors At WaMu Are Begging For Trouble I received this comment from Chris Puplava at Financial Sense.  [...]

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A man was telling his neighbor in  Sun City   Center , “I just bought a new hearing aid. It cost me four thousand dollars, but its state of the art. It’s perfect.” “Really,” answered the neighbor. “What kind is it?” “Twelve thirty.” Communication is important, and is downright critical for any lender seeking warehouse lines. [...]

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