With the continued slowdown in the economy, the family made the decision to let my son go. After 16 years we had a certain amount of loyalty, but the harsh realities had set in. He wondered why it was him and not his younger sister, and I explained that she had edged him out on the latest report card, and besides, since he just received his driver’s license, he could better fend for himself. Fortunately he had accrued some vacation time. In all seriousness, mortgage companies find themselves in the same situation as we were in last year, examining payrolls and overhead. Some companies are more fortunate than others. At Wells Fargo, for example, lay-offs have been rare, with the manpower being moved to auditing files and packages instead. Recent lay-off news stories from Indy and Wachovia remind us, however, that employment can be fleeting.
Oil prices are down, which, generally speaking, does not help development of alternative efficient energy sources. But at least it helps our inflation outlook – you wouldn’t want it to get carried away, as in Zimbabwe , which introduced a 100-billion dollar note!
Washington Mutual reported a $3.3 billion quarterly loss, worse than Wall Street was anticipating - a net loss of $6.58 a share, which included a charge related to a $7 billion capital raise the company announced in April. Excluding the charge, WaMu reported a loss of $3.34 a share, compared to a year ago when the company reported a profit of $830 million. Although that about does it for economic news, and there is nothing scheduled to be released, rates are worse again early this morning, with the 10-yr up to 4.15% and mortgage prices worse by another .250.
During the weekend of August 16, Fannie Mae will update Desktop Underwriter Version 7.0 to implement policy changes including Adverse Market Delivery Charges, New Flow Business Pricing Requirements, Temporary Increase to Our Conventional Loan Limits, Mortgage Eligibility and Pricing Updates for Desktop Underwriter® and Manually Underwritten Loans, Jumbo-Conforming Mortgage Loans – ARM Plans, MBS Pooling, and Other Information, Jumbo-Conforming Mortgage Loans – Expanded Eligibility and Products, National Down Payment Policy Replaces Maximum Financing in Declining Markets Policy, and 2008 Area Median Income Limits.
Citi announced the introduction of new product offerings, and policy enhancements for Agency Jumbo Loans. Key changes to the program include the addition of 4 product options - the 7/1 and 10/1 ARM Full Amortization and Interest Only (10-year I/O period) which must be manually underwritten, AUS not eligible. Citi announced that all manually underwritten lo