Do the "Alphabet Song" and "Twinkle, Twinkle Little Star" have the same tune? And did you just try singing the two songs?

Generally speaking, mortgage folks are a pretty optimistic bunch, although "trust but verify" is an approach that many use in their business lives. It turns out that the HVCC, which has good intentions but arguably poor implementation and ramifications, could be on its way out. The House Financial Services Committee has just passed an amendment to the Consumer Financial Protection Agency Act to phase it out, and allow all loan originators, licensed or registered in accordance with the SAFE Mortgage Licensing Act, to order appraisals directly. H.R. 3126 is the number of this bill. Although this is just a committee vote, and still has a long way to go, it is a "first step" the Consumer Financial Protection Agency Act is expected to be merged with a number of other regulatory reform bills before moving to the House floor for a vote, and any differences must be ironed out within the House and then with any Senate versions before going to the President.

In other good news, BB&T, who took over Colonial's warehouse operation, named a new president of its Mortgage Warehouse Lending Division which is based in Orlando. Through the move, and their press release, BB&T signaled that they will continue their warehousing operation. "This is a commercial product that dovetails nicely with our retail mortgage business. After evaluating the business model, we plan to continue in the mortgage warehouse lending business. We feel it offers excellent growth opportunities given our client relationship model."

SunTrust Bank, who knows a thing or two about mortgage lending, reported a net loss for the third quarter of 2009 of $377 million, compared to net income $304 million in the third quarter of 2008. "The decline in earnings compared to the third quarter of 2008 was primarily attributable to the $390.8 million after-tax increase in the provision for loan losses and a $292.8 million after-tax increase in valuation losses associated with the fair value of the Company's public debt.  The net loss for the third quarter was $133.5 million higher than the previous quarter, driven primarily by a $106.5 million after-tax increase in provision for loan losses."

For the week ending on October 21st, the Federal Reserve's MBS program was a net buyer of $18.1 billion agency MBS which brings their year-to-date purchases to $959 billion. Hey, these bonds are great investments, right? This week's purchases were slightly lower than their prior three week purchases (after adjusting for the number of business days) but were not as low what many market participants feared them to be. Their purchases over the latest week were focused in 30-year 5.0s and 5.5s and to a lesser extent in 4.5s. Fed also purchased $3 billion GNMA's (FHA & VA loans) in the latest week.

Yesterday rates worsened early in the day, and then pretty much seemed to stay put and watch the equity markets come back from Wednesday's losses. The 10AM EST Leading Economic Indicators number did not help the call for lower rates: it was up 1% for September, more than forecast, and its sixth straight increase. Treasury announced next week's auction of $44 billion in 2-yr notes, $41 billion of 5-yr's, and $31 billion of 7-yr notes, all three amounts higher than last few auctions. The only news out today is Existing Home Sales at 10AM, but the yield on the 10-yr is back up to 3.47% and mortgage prices are worse by between .125 and .250.

(Last golf joke of the week.)

A golfer teed up his ball on the first tee, took a mighty swing and hit his ball into a clump of trees.  He found his ball and saw an opening between two trees he thought he could hit through.  Taking out his 3-wood, he took a mighty swing. The ball hit a tree, bounced back, hit him in the forehead and killed him.

As he approached the gates of Heaven, St. Peter asked, "Are you a good golfer?"

The man replied: "Got here in two, didn't I?"