Next week is the big secondary marketing conference in New York. All those folks getting ready to go should ask themselves, "Why do we put suits in garment bags and garments in a suitcase?"

You're richer than you think, I hope. "The Global Rich List" website ( generates a wealth ranking for its users based on their annual income. The median income in the United States in 2009 (half above, half below) was $52,000 and if that was your income you are the 58,252,719th richest person in the world (or in the top 0.97 percentile of all moneymakers). Poke, the owner of the site, assumes that the world's total population is 6 billion and the average worldwide annual income is $5,000.

It's Monday, which these days includes a post-mortem accounting of Friday's FDIC moves. One thing to note - continued small bank closures don't make large mortgage investors really want to increase their exposure in that sector.  Why would it? Southwest Community Bank (MO) is now part of Simmons First National Bank (AR). Midwest Bank and Trust Company (IL) is now part of FirstMerit Bank (OH). Satilla Community Bank (GA) was taken over by the FDIC and Ameris Bank (also of Georgia). Liberty Bank (MI) has changed its logo to Bank of Ann Arbor's.

Originators looking for opportunities in Illinois, or who would like to live there, would be advised to check out Chicago Bancorp. It is one of the country's largest privately held national mortgage bankers, and is expanding its consumer direct call center.  Based in downtown Chicago, the company (which continues to grow) is seeking experienced and highly successful mortgage call center sales agents and managers. Interested parties should contact Carrie Beeks, Director of Recruiting, at Its website is

The National Information Center has just released consolidated financial statements for bank holding companies for the first quarter.

The top 50 bank holding companies "shed" $25 billion in residential mortgage-backed securities between January and March. Among the top 10, only two increased their holdings. The top 5 bank holding companies, in terms of assets, are Bank of America, JPMorgan Chase (didn't James Pierpont Morgan put periods and spaces between his initials?), CitiGroup, Wells Fargo, and Goldman Sachs. Wells Fargo, despite being the largest originator of mortgages, declined the most: $13 billion in three months. Whether that is due to an accounting change, a move into whole loans instead of securities, the strategy of "since the Fed's buying, let's sell", or "once the Fed stops buying, mortgage rates are going to go up so let's sell", down their holdings went. And if anyone thinks that there is not cash out there, the top 50 banks increased their holdings of US Treasuries by $51 billion. 

When I borrowed money to buy my house, of course I expected the lender to just forgive part of my debt. (Ok, maybe not - why should I?) Pressure is mounting on loan servicers and investors to reduce troubled homeowners' loan balances, but Fannie and Freddie do not lower the principal on the loans they back, instead opting for interest rate reductions and term extensions when modifying loans. There is continued press about F&F being under more and more pressure by the Obama Administration to do principal write downs. HERE IS SOME

In early May the Federal Reserve released its quarterly Senior Loan Officer Survey. Banks are becoming increasingly willing to lend to consumers as well as to medium and large firms, credit conditions for residential and commercial remain restrictive.

This is no surprise to mortgage bankers, but there are some signs of loosening in some guidelines and geographic areas. At least underwriters are not being barraged with tightening guidelines every week, as they were in the past, and some believe that lending standards in this area of the economy will eventually begin easing outright. According to the survey, with respect to commercial real estate loans, the net percentage of banks tightening standards is down to +12.5% versus a peak of +87.0% in Q4 2008. The current pace of tightening is at its slowest rate since Q3 2006 (+10.7%). Only 1.9% of net respondents to the Fed's survey are reporting tighter standards for prime mortgages, the lowest reading for the history of the series which dates back about 3 years. Nontraditional mortgages, like ARM's and Alt-A, are experiencing ne tightening of just +4.8%, also the lowest reading in the brief history for which they have data.

I can't tell which is more interesting, accounting or economics. The Golden Gate Bridge District is contemplating yet another toll increase not only to fund revenue losses in the local ferry service, but because commuter traffic across the bridge is down resulting in a decline in revenue. So let's charge the remaining drivers more!

In New York, the Department of Banking has changed its fee structure, in some cases tripling assessments for supervising brokers and increasing renewal fees. Some lenders feel that the Department is increasing the number of hours billed per lender in an effort to maintain their workforce and not lay off employees; the Department claims that with volumes dropping, fees must increase for regulation and supervision, especially of smaller lenders. Even though the Department of Banking has fewer companies to regulate, its costs have gone up.  

US Bank's wholesale group announced that after Wednesday all government loans, both FHA and VA, must follow its new minimum FICO score and trade line requirements. Loans under the FHA Streamline Refinance (non-credit qualifying) Non LP or DU program will require a 640 minimum FICO score (loan amounts over $417,000 require a minimum 680 FICO score). VA IRRRL loans will see an increase of current FICO scores by 20 points. FHA and VA Loans with LP or DU AUS Approval will see no minimum FICO score changes, nor will manually underwritten loans (non LP or DU, excluding non-qualifying FHA Streamlines and VA IRRRLs).

Flagstar announced to its brokers that coops are now allowed at some high balance loan limits under Fannie Mae Cooperative Program. Cooperative properties with a loan amount exceeding $417,000 must be registered under this program and are now eligible up to $729,750 in some NY areas All loans must have an appraisal completed on form 2090, Individual Cooperative Unit Appraisal Report (appraisal form 2095 is not acceptable), ordered through an approved Appraisal Management Company (AMC). Check with Flag for the specifics.

Returning to the economy, there is overall consensus that the US is on some type of recovery. Even GM reported a profit this morning. Last week's news confirmed that: the trade numbers showed growth, retail sales were up, industrial production and capacity utilization were up, and initial jobless claims were down. On Friday, bond prices improved and rates dropped, primarily based on continued European problems. These problems are not going to go away any time soon, so look for more volatility. Increasing volatility and lower rates is an interesting situation, as are rising gold prices, the rising dollar, and declining oil prices. Mortgage rates have definitely lagged Treasury rates as yields head down - why would an investor or servicer want to pay a high premium for a loan that may not be on their books for a decent amount of time?

There are a couple of important releases this week, although, as I have mentioned, what difference does a monthly number being up or down a few tenths versus estimates make if there are gigantic problems in Europe? What exciting drama does the economic news hold for this week? Today we already had the Empire State Manufacturing Survey, assuming that there is still manufacturing in New York: "19.1". Tomorrow we have Residential Construction with Housing Starts and Building Permits, and the Producer Price Index. Wednesday we have the Consumer Price Index, to check just how much of the increase or decrease in PPI is being passed along to us consumers, and the release of the April Fed meeting. Thursday is Initial Jobless Claims, the Philly Fed Survey, and Leading Economic Indicators. Friday zip. So far this morning the 10-yr is down to 3.43% and mortgage prices are once again better by .125-.250. READ MORE ABOUT THE WEEK AHEAD

A blonde gal decides to go shoe shopping but no one seemed to have what she was looking for, which was a pair of alligator shoes.

After becoming very frustrated with the attitude of one of the shopkeepers, the young blonde declared, "Well, then, maybe I'll just go out and catch my own alligator and get a pair of alligator shoes for free!"

The shopkeeper replied with a sly smile, "Well, little lady, why don't you go on and give it a try?"

The blonde headed off to the swamp, determined to catch an alligator. Later in the day, as the shopkeeper was driving home, he spotted the same young woman standing waist deep in the murky water, shotgun in hand.
 As he brought his car to a stop, he saw a huge 9-foot gator swimming rapidly toward her. With lightning reflexes, the blonde took aim, shot the creature, and hauled it up onto the slippery bank. Nearby were 7 more dead gators all lying belly up. The shopkeeper stood on the bank, watching in silent amazement as the blonde struggled mightily and barely managed to flip the
gator onto its back.

Then, rolling her eyes heavenward, she screamed in frustration, "Darn it! This one's barefoot too!"