June 2008

Wow!

Just popped up on my feedreader.

No more Pick-a-Pay, no more anything that has a negative amortization.  Period!

Can I keep my Calculator?

What about the cool spreadsheets I created?

Seriously, The Neg Am loan has a very valuable place in the finance world when properly used.  I believe Wachovia (world Savings) had the highestperforming Neg Am Portfolio in the biz.

VIDEO LINK

Wow!

Today, June 30th, is the last day Countrywide will exist as itself.

Tomorrow it’ll be Bank of America.

Did you know Countrywide started in 1969?

No, I wasn’t lending back then, I was 10 years old.

Yes, Countrywide has received it share of bad press recently.

Deservedly or not, they’ve also done some good things.

• Was the B of A merger a thinly disguised Fed orchestrated bail out?
• Does Countrywide deserve everything they get?
• Should Angelo Mozillo spend a little time behind bars?

All interesting and compelling questions.
I can’t help but think of all the good Countrywide also accomplished.

http://www.veoh.com/videos/v14592821kaHBM9cr

How many people would have enjoyed home ownership if it wasn’t for Countrywide?
What do you think?

Blogging from the Big D this week (Dallas, TX that is), actually I am about to get on a flight heading back to Miami to get at least a half day in the office today.  The story of how I got to Dallas yesterday is rather fitting for this week’s post.  Here is a brief look at what happened…

My original schedule was to fly to San Juan then over to Santo Domingo, DR, retracing my steps the next day.  However, upon arrival in San Juan, I was then sent to Dallas followed by a flight home this morning.  The point being that I was redirected “midstream” and without fully knowing what happened.  Only after investigating further did I begin to see the bigger picture.

Mortgage backed securities last week reacted very similarly.  Of the two main events, neither presented a clear picture of what lies ahead.

First, the Fed decided to leave rates unchanged despite warning of the increased inflationary expectations.  Friday’s PCE and other data showed inflation to not be of much concern, or was it?  Data was rather skewed as the economy was flooded with the stimulus checks, so the outlook may not be as rosy as it appeared, but only time can prove that.

Nevertheless, in the battle for the trader’s dollars, bonds won the week and sent mortgage rates lower.  This could be either a winning or deadly combination.  And there won’t be much delay for the data to be pouring in as you can see below, with the end of the week sparking its own fireworks with the Jobs Jamboree.

• Monday:  Chicago PMI (9:45)
• Tuesday:  ISM Index (10:00)
• Wednesday:  ADP Employment Report (8:15), Crude Inventories (10:00)
• Thursday:  Non-Farm Payrolls (8:30), Unemployment Rate (8:30), Initial Jobless Claims (8:30), Average Work Week (8:30), Hourly Earnings (8:30), ISM Services Index (8:30)

This week will be a pivotal one for bonds on both the fundamental and technical sides.  Bonds have been pushing higher over the last two weeks and have broken through their 25-day moving average.  They are up against this level and the downward trend line right now, so if they can hold their own this week, we can say that trend has been broken and rates will be heading lower once again.  If not, well, get ready for the next freefall.

I really don’t know how to say this. You may be surprised at how the words just don’t flow because this isn’t happy talk. It’s just reporting.

Here in title insurance land, we’re the survivors. We’re the ones who are still here pumping out policies and helping those folks still in mortgage lending and real estate get the job done.

Here’s what it feels like. The infrastructure under which I work has had the roof blown off and what’s left is tattered and torn but there is a frame, a structure on which to rebuild.

The flesh, or the substance that once filled in that structure was the enabler goo. This was the facilitating machine that oiled the machine of fraud, flips, kickbacks and grease, the extent of which I never imagined. Some of it’s still there, but the cool clean air of truth is slowly killing what’s left of the crappiest of crap and I hope the good doctors of regulation will do the final sweep for whatever gunk the free market doesn’t correct.

So, here I am, still doing things the way I do the things I do. Traditional title insurers, those good guys who weathered the storm, we are moving money. I am diligently and as quickly as possible moving title policies and remitting premiums with a sense of medicinal need. Money is blood and as the title insurance giants are collapsing and dying from the lack of it, and cutting off tentacles and severing relationships to find the core in which they can live and breath, we must get them the money they need to survive because in this crazy world, even though they tried hard to kill us, we can’t survive without them.

Go figure.

I believe in the power of hope and the power of atonement.