"All real estate is local" as they say.

How is the Lake Tahoe market in California? Well, for starters, the new Ritz Carlton has received a notice of default. The NOD came about a month after its developer put almost $1 billion worth of other real estate development in that area (Northstar) into bankruptcy - over-building in a luxury market. Units are being sold at steep discounts, and the hotel property (not the Ritz company) is behind on almost $19 million in payments. And speaking of foreclosures, celebrities are not immune: READ MORE

What do California, Florida, Nevada, and Arizona have in common? All 20 of the large metropolitan areas with the highest rates of foreclosures during the first quarter were located in these states. RealtyTrac's research showed that the four each had at least one metropolitan area with a population of 200,000 at the top of the 206 city list. California accounted for ten positions, Florida seven, Nevada two and Arizona one. On the "good news" side, however, 14 of the top 20 areas and eight of the top ten reported a decrease in foreclosure activity from the same quarter in 2009, mostly due to government intervention and other non-market influences. FULL STORY

Fannie Mae announced that it will tighten lending requirements for its interest-only loans and adjustable rate mortgages. If a borrower wants an IO mortgage through Fannie, for example, he or she will have to make down payments of 30% of the sale price. For ARM's, Fannie will only buy those underwritten to ensure that borrowers could still afford payments even if their interest rates reset to the higher of either 1) the loan's initial interest rate plus two percentage points or 2) the maximum the interest rate the loan can rise to, known in the industry as the cap rate. As an example, for a loan with a beginning rate of 5% and a cap rate of 6% borrowers would have to demonstrate they could still keep up payments even if the rate rose to 7%. If the cap rate is 8%, borrowers would have to be able to afford an 8% loan. For an ARM with a fixed period (like a 3-1) any initial period with 5 years or less qualify at greater of note rate +2% or fully indexed rate, and IO loans will have a maximum LTV 70% and a minimum FICO of 720 with 24 months minimum reserves. Balloon Loans, unless they receive special approval, are going away entirely with Fannie.

Fannie is giving the industry some lead time: all loans not meeting the new guidelines must be purchased as whole loans on or before August 31, or delivered into MBS pools with issue dates on or before August 1, 2010. HERE is the bulletin. Freddie Mac already eliminated Interest Only. READ MORE

Freddie's single family serious delinquency rate fell in March, marking the first month-month decline since 2007. In many pools containing loans from 2005-2008 90-day delinquencies and 120-day delinquencies were down. Analysts will wait for Fannie's numbers before declaring any kind of trend, but at least investors believe that this indicates a continuation of slow prepayments on higher-coupon Freddie securities (Golds).

The FDIC, seemingly in the news more and more, sent out an announcement with a listing of its recent "enforcement decisions, including final orders or cease and desist orders. No one likes to see their employer on the list: http://www.fdic.gov/bank/individual/enforcement/neworders.html

The FDIC also announced the "shuttering" of seven banks on Friday, with three in Puerto Rico. (I didn't even know that the FDIC guaranteed deposits in Puerto Rico.) The three Puerto Rican banks closed were Eurobank, R-G Premier Bank, and Westernbank. Eurobank reopened as Oriental Bank and Trust, R-G Premier Bank as Scotiabank de Puerto Rico, and Westernbank as Banco Popular de Puerto Rico (remember eLoan?). Within our shores, CF Bancorp (MI) is gone, and replaced with First Michigan Bank. Champion Bank of Missouri has been incorporated BankLiberty, also of Missouri. BC National Banks is part of a purchase and assumption agreement with Community First Bank, also of Missouri. And Frontier Bank (WA) is now part of Union Bank, National Association (CA).

Back in February MGIC announced its new credit-tiered states. Starting Saturday these took affect with the following states not having Credit-Tiered rates: AK, DE, MA, MA, MI, NY, OH, VA, and WA.

CitiMortgage reminded its clients that credit overlays do indeed exist in order to reduce the risk of the loans it purchases. These are generally more stringent than standard agency guidelines, which answers the question often posed by brokers, "If Fannie says we can do it, then why does Citi (or other investors) not allow it?" In fact late last week CitiMortgage sent out the list of dozens of overlays as a summary, but reminded patrons to refer to its Correspondent Manual.

Are mortgage rates really the problem in originating any loan? Probably not, as underwriting guidelines and a lack of equity continue to hinder brokers and agents. (I don't know if this applies, but on his death bed, Earl Woods supposedly gave Tiger the following advice: "Focus on golf. Screw everything else.") If you look at 30-yr rates now, versus a week ago, or a month ago, they are about the same. Yes, they are about .250% higher than a year ago, but the impact of that is pretty minimal. What did the end of last week tell us about the economy? Real GDP grew during the first quarter, consumer confidence rose in April, and weekly first-time unemployment claims fell. On the flip side, Greece continues to be a huge credit problem which has ramifications for other countries, and here in the US our debt continues to grow as does overall unemployment (hovering around 10%).

This week shows quite a bit of news. We start today with Personal Income & Consumption (Spending) - see below, the ISM Manufacturing Index, and Construction Spending. Tomorrow we have Pending Home Sales, Wednesday the ISM Services number and ADP private-sector employment figures. Thursday is Initial Jobless Claims and some productivity and costs numbers. Friday is the biggest economic event with the employment report containing Non-farm Payroll, the Unemployment Rate, Hourly Earnings, etc. Non-farm Payroll data, which last month showed an actual increase of 162,000 jobs, is expected to show another increase of around 200,000 jobs. Census hiring is impacting the numbers, but most analysts believe that private sector hiring should do well.

April was a good month, and the US Treasury's 10-year notes saw their first monthly gain since January. Much of this improvement was seen as a flight to quality given Greece's fiscal crisis, although this morning it is reported that the 11 million people in Greece will be receiving $147 billion in aid. Holy smokes! U.S. consumer spending increased as expected in March for a sixth straight month (+.6%, as expected) and Personal Income rose 0.3 percent following a 0.1 percent gain in February.  With consumers increasingly tapping their savings to fund consumption, savings fell to 2.7%, an annual rate of $303.9 billion and the lowest level since September 2008. After this news we find the 10-yr yield at 3.70% and mortgage prices worse by .125-.250.

An elderly couple, having their 50th wedding anniversary dinner, starts reminiscing about their life together. The husband confesses that he had never cheated on her and asks: "Have you ever cheated on me?"

She confesses: "Yes I have. 3 times, but they were for your benefit."

Taken back he asks, "For my benefit, how could that be?"

She replies, "Remember when we first started out and couldn't make the mortgage payment? Well, I met with the banker and after that we weren't behind.

"The second time, you had the heart attack and we couldn't pay the hospital. Well I met with the doctor and after that we were behind."

He says, "Well I see how that was for me, for us. I forgive you. And the third time?"

"Remember when you needed 29 votes to become the president of the realtor board?"