Marc's Mortgage Matter's

A blonde was driving home after a game and got caught in a really bad hailstorm. Her car was covered with dents, so the next day she took it to a repair shop. The shop owner saw that she was a blonde, so he decided to have some fun. He told her to go home and blow into the tail pipe really hard, and all the dents would pop out.
So, the blonde went home, got down on her hands and knees and started blowing into her tailpipe. Nothing happened... So she blew a little harder, and still nothing happened.
Her blonde roommate saw her and asked, “What are you doing?”
The first blonde told her how the repairman had instructed her to blow into the tail pipe in order to get all the dents to pop out.
The roommate rolled her eyes and said, “Uh, like hello! You need to roll up the windows first.”

In the news last week was another large set of fraud charges, this time against 41 lenders, lawyers and others in the real estate industry who they said used fraud to obtain more than $64 million in loans connected to more than 100 residential properties in New York State! Apparently the FBI, Secret Service, and the New York State Banking Department were all in on the investigation which turned up wire fraud, bank fraud and conspiracy charges against the lawyers, mortgage brokers and loan officers. It appears that mostly it was people accused of “obtaining loans through fraudulent means by falsifying mortgage applications, flipping properties and stripping equity from properties.”

It would seem that the relentless pull of a rising stock market and a slightly increasing risk appetite among investors has finally dragged at least some money out of its safe hiding place in 100% guaranteed Treasury obligations. The Dow Jones Industrial Average topped 10,000 this week, oil prices rose considerably, and gold also powered ahead.

In the "normal" days of old, yields on Treasuries had a very strong influence on fixed-rate mortgage rates, and it would appear that this relationship is being re-established.

In the earlier part of the decade, the 10-year Treasury became a good reliable barometer for the direction of 30-year fixed mortgage rates. The financial market crisis, however, changed that to a real degree, as Treasury yields and mortgage rates often went in different directions as investors showed a desire for one (Treasuries) at the expense of the other (mortgages).

But no more: improving markets and the unwavering influence of the Fed in mortgage markets has seen that gap shrink. This means that any excess cushion is gone, and moves in Treasuries are more likely to again translate though to mortgage prices, especially conforming ones. This week, the fourteen-basis-point rise in the 10-year TCM translated into a eleven-basis-point rise in the 30-year conforming average, for example.

The Federal Reserve released its latest set of discussions about the economy from their September 22-23 meeting. Much of that discussion pondered exactly when, by what means, certain market supports could be removed, and to that end the Fed revealed that it is in the process of evaluating several new tools to help promote a smooth transition to a fully private marketplace. We'll be very interested in seeing what develops here, particularly in terms of the implications for mortgages and inflation in 2010. 

APHORISM: A SHORT, POINTED SENTENCE EXPRESSING A WISE OR CLEVER OBSERVATION OR A GENERAL TRUTH

1. The nicest thing about the future is that it always starts tomorrow.

2. Money will buy a fine dog, but only kindness will make him wag his tail.

3. If you don't have a sense of humor, you probably don't have any sense at all.

4. Seat belts are not as confining as wheelchairs.

5. A good time to keep your mouth shut is when you're in deep water.

6. How come it takes so little time for a child who is afraid of the dark to become a teenager who wants to stay out all night?

7. Business conventions are important because they demonstrate how many people a company can operate without.

8. Why is it that at class reunions you feel younger than everyone else looks?

9. Scratch a cat and you will have a permanent job..

10. No one has more driving ambition than the boy who wants to buy a car.

11. There are no new sins; the old ones just get more publicity.

12. There are worse things than getting a call for a wrong number at 4 AM. It could be a right number.

13. No one ever says 'It's only a game.' when their team is winning.

14. I've reached the age where the happy hour is a nap..

15. Be careful reading the fine print. There's no way you're going to like it.

16. The trouble with bucket seats is that not everybody has the same size bucket.

17. Do you realize that in about 40 years, we'll have thousands of old ladies running around with tattoos? (And rap music will be the Golden Oldies!)

18. Money can't buy happiness -- but somehow it's more comfortable to cry in a Corvette than in a Yugo.

19. After 70, if you don't wake up aching in every joint, you are probably dead!

20. Always be yourself because the people that matter don't mind, and the ones who mind, don't matter!