Marc's Mortgage Matter's

A US Congressman was seated next to a little girl on the airplane when the Congressman turned to her and said, “Let's talk. I've heard that flights go quicker if you strike up a conversation with your fellow passenger.”
The little girl, who had just opened her book, closed it slowly and said to the stranger, “What would you like to talk about?”
“Oh, I don't know,” said the Representative. “How about the banking crisis?” And he smiles.
“OK,”' she said. “That could be an interesting and timely topic. But let me ask you a question first: A horse, a cow, and a deer all eat the same stuff - grass. Yet a deer excretes little pellets, while a cow turns out a flat patty, and a horse produces clumps of dried grass. Why do you suppose that is?”
The Congressman, visibly surprised by the little girl's intelligence, thinks about it and says, “Hmmm, I have no idea.”
To which the little girl replies, “Do you really feel qualified to discuss banking when you don't know sh-t?”

The other day Existing Home Sales were up over 7%. That is great news. But as I mentioned earlier in the week, the “recovery” is not impacting every segment in the same way, and in fact most of the housing price boom has been in the lower-priced home market. For example, sales of houses priced at less than $100,000 were up almost 39%. But sales of homes with a price tag of over $250,000 were actually down, and in fact for anything more than $1 million sales were down 25-30%.

First American CoreLogic reports that there are about 600,000 option ARMs scheduled to reset in the next four years. Normally this would be ok, but this year default and foreclosure rates on option ARMs have passed those of subprime mortgages. Option ARMs, which helped so many originators increase their fundings and profits, accounted for $750 billion in mortgages made from 2004 to 2007. Roughly a third are already in default, according to analysts. Of course borrowers enjoyed the option of paying less than the interest, which increases the balance every month; just the interest; the equivalent of a 30-year fixed-rate mortgage; and the equivalent of a 15-year fixed, and apparently 75% of borrowers take the minimum option, which usually expires after five years or when the balance reaches a cap, generally 110 percent to 125 percent of the original loan.

Is your sentiment as a consumer improving? The sentiment of those consumers polled by the University of Michigan’s is, improving in late August but still below July’s level. And what else happened Friday? The FDIC said it had 416 banks on its "problem list" at the end of June, equivalent to about 5% of the nation's banks. And these banks had/have a combined $300 billion of assets, compared with only $78 billion a year ago. So should the government send the FDIC more money now or wait a month or two? On Friday the FDIC “only” closed down three banks: Affinity Bank (CA), Bradford Bank (MD), and Mainstreet Bank (MN).


Reverend Boudreaux was the part-time pastor of the local Cajun Baptist Church and Pastor Thibodaux was the minister of the Covenant Church across the road. They were both standing by the road, pounding a sign into the ground that read:

"Da End is Near. Turn Yo Sef 'Roun Now fore It Be Too Late!"

As a car sped past them, the driver leaned out his window and yelled, “You religious nuts!”

From the curve they heard screeching tires, a big splash and then silence....
Boudreaux turn to Thibodaux and axk,

“Do ya tink maybe da sign should jussay.....'Bridge Out?'”