A small boy swallowed some coins and was taken to a hospital. His grandmother telephoned to ask how he was, a nurse said, "No change yet."

We started off the week with both the stock and bond markets making a little change for investors: both improved. The folks on Wall Street, if there is such a thing anymore, reported that mortgage loan production selling was pretty heavy, suggesting that locks picked up as agents took advantage of the intra-day price improvements. The Fed was in doing the usual buying ($11 billion net last week), as were money managers and hedge funds, and lower coupons tended to do a little better price-wise versus higher coupons. Bonds closed near the highs of the day (lows in rates), and the 10-yr went back down to a yield of 3.66%. Gold was up $30 an ounce... what is wrong with this picture? Currently the futures market is pricing in an 82% chance that the Fed keeps rates somewhere between 0% and 0.25% through the end of June.

For economic news today we got Housing Starts & Building Permits, Export Prices, and Industrial Production & Capacity Utilization. U.S. import prices rose 1.4% last month, mostly due to oil, and it was the sixth consecutive monthly increase. Export prices gained 0.8 percent in January after a 0.6 percent rise in December. And U.S. housing starts (+2.8%) rebounded more strongly than expected to their highest level in six months in January, while permits fell slightly (-4.9%) less than forecast. Starts for the volatile multifamily segment increased 9.2%. After this news we find the yield on the 10-yr back up to 3.70% and mortgages worse by about .125.

Why should anyone build a lot of new homes when there seem to be so many foreclosures looming, and how are foreclosures doing out there?

Although percentage-wise filings dropped in January from December by 10%, Realty Trac reported that foreclosure filings were above 300,000 for 11th straight month. And versus a year ago they are up 15%. And home ownership here in the US is back down to 2000 levels: in the fourth quarter the percentage stood at about 67.2%.

While we're on foreclosures, for those who like bleak news recent studies conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure. The studies, reported the WSJ, suggest that more waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years. "...estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments." Of course the problem is largely concentrated in Arizona, California, Florida and Nevada. READ MORE

PMI disappointed analysts yesterday by reporting a much wider-than-expected quarterly loss of $228 million versus 2008's $181 million loss. The MI division suffered a net loss of $242 million versus the loss of $174 a year earlier. On the positive side, Fannie Mae approved PMI as a direct issuer of mortgage guaranty insurance, and the MI unit also obtained a waiver to continue writing new mortgage insurance business, even if it falls below the capital requirements of the Arizona state regulator. According the press release, PMI also said it is currently in discussions with Freddie Mac regarding approval of PMI Mortgage Assurance Co (PMAC) to transact new mortgage insurance business. PMAC is a subsidiary of PMI Mortgage Insurance Co, PMI's main mortgage insurance company.

MGIC, ranked #1 among MI companies, and who posted its tenth straight quarterly loss last month also made news. Its president sent a letter which discussed utilizing MGIC Indemnity Corporation ("MIC"), a wholly owned subsidiary, to support new mortgage insurance business. "MIC" (not to be confused with Rocky's trainer who was told, "Cut me Mick.") has been approved by Fannie Mae, Freddie Mac, and the Office of the Commissioner of Insurance for the State of Wisconsin ("OCI") to concurrently write new business with MGIC beginning on April 1, 2010. "MIC will be the writing company for states with minimum regulatory capital requirements that do not grant MGIC a waiver to continue writing new business and MGIC will remain the writing company in all other states." Same programs, same rates, same guidelines according to the president.

Wells Fargo Wholesale Lending will now accept any of the three following fee detail forms along with the Good Faith Estimate (GFE): Wells Fargo Fee Details Form, Calyx Point Initial Fees Worksheet, or Ellie Mae's Encompass Itemized Fee Worksheet.

Wells' wholesale also came out with a lengthy update for their broker clients. Included in it were Application Package Requirements (Minimum application package only: Good Faith Estimate, 1003, automated findings and fee details sheet, or those documents as well as the full credit package), a reminder that the Home Affordable Refinance Program is scheduled to end June 10th (this includes the Freddie Mac Relief Refinance Mortgage and Fannie Mae DU Refi Plus, and brokers need to follow Wells' lock deadlines), a reminder about the new FHA appraisal process that began earlier this week, and to make sure that appraisal requests have the correct information, Imaging Best Practices, how to view tax transcripts, a note about the FHA Property Flipping Policy Changes, and information on approval designation for established Florida condo projects (established Florida condominium projects on the Fannie Mae Special Approval Designation list are eligible for financing with no condominium approvals required with certain restrictions.)

Not to be outdone, last week SunTrust released a large number of updates to its customers. SunTrust updated its guidelines for properties purchased at auctions (the fees used to calculate the final bid price are referring to fees paid by the borrower, not the seller of the property), and that condos bought at an auction will now follow current SunTrust Condominium and PUD Approval Requirements. SunTrust revised its Non-Permanent Resident Alien policy, along with its "Fraud Prevention Certification Guidelines (incorporation of the update for the verbal VOE, and updated the inclusion of the 2009 tax returns).

The company announced that the K-1 and K-3 visa classifications are no longer acceptable. For non-permanent resident alien borrowers who have an un-expired visa and are changing employers at or after loan application, a valid EAD card must be obtained, and listed the requirements that borrowers applying for Permanent Resident Alien Status must have.

Starting yesterday, SunTrust Mortgage updated its Declining Markets Index, adjusting some pricing & LTV's, moving some counties around, and spelling out the criteria for future updates. The investor also updated their Agency Affordable Lending Product Description, followed HUD's guidance on flood insurance, and will be implementing the changes outlined by HUD for all non-AUS and AUS transactions.

Of much interest, however, is that SunTrust updated its "Ineligible Appraiser and Appraisal Company" list, not for publication, its "Ineligible Settlement Agent" list, which can be found HERE , and Fannie's list of approved condo projects HERE

March 1 is right around the corner, and Fannie Mae begins requiring the submission of electronic appraisal reports and their addenda in the MISMO XML standard for all loans requiring an appraisal report. Fannie Mae is said to support the conversion from other XML standards to MISMO XML. At some point around the middle of the year Fannie Mae will be enhancing the loan delivery file, and anticipates being able to accept delivery data in the most current MISMO XML file format. The 2000-Character Loan Delivery File format will continue to be supported for a sufficient period of time for lenders to transition to the new format, which will be phased in.

A woman and a man are involved in a car accident on a snowy, cold Monday morning: it's a bad one. Both of their cars are totally demolished, but amazingly neither of them is hurt. God works in mysterious ways.

After they crawl out of their cars, the man is yelling about women drivers. 

The woman says, "So, you're a man. That's interesting. I'm a woman. Wow, just look at our cars! There's nothing left, but we're unhurt. This must be a sign from God that we should be friends and live in peace for the rest of our days."

Flattered, the man replies, "Oh yes, I agree completely, this must be a sign from God! But you're still at fault... women shouldn't be allowed to drive."

The woman continues, "And look at this, here's another miracle. My car is completely demolished but this bottle of wine didn't break. Surely God wants us to drink this wine and celebrate our good fortune."

She hands the bottle to the man. 

The man nods his head in agreement, opens it and drinks half the bottle and then hands it back to the woman.

The woman takes the bottle, puts the cap back on and hands it back to the man.

The man asks, "Aren't you having any?"

The woman replies, "No. I think I'll just wait for the police..."