Now, on Friday, Colonial BancGroup was seized and purchased by BB&T. with $25 billion in assets and $20 billion in deposits Colonial is not only the largest seizure this year, but the sixth largest bank failure in US history. For those playing along at home, BB&T is based in North Carolina and owns 1,500 branches in the Southeast. And unfortunately for mortgage companies, Colonial had billions and billions of warehouse lending, so that leaves many independents scrambling for warehouse lines. No warehouse no lending for a non-depository mortgage bank.
(Colonial wasn't alone on Friday: four other banks failed. Community Bank of Las Vegas went under, with no buyer in sight. Dwelling House Savings and Loan Association in Pittsburgh had PNC Bank assume control of its assets - the first Pennsylvania bank to fail this year. Two banks in Arizona failed: Union Bank and Community Bank both were taken over by MidFirst Bank of Oklahoma City, which are the first in Arizona this year, and brings the nationwide total to 77.)
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Colonial applied for TARP assistance but had been told it needed to be able raise an additional $300 million in private capital to be eligible for the federal assistance. At that point TBW, and a group of other institutions, stepped up as investors but that deal collapsed. The FDIC's trust fund, used in covering bank failures, took another hit. Indymac, so far, has been the most expensive with almost an $11 billion hit. Colonial could cost the FDIC another $3-7 billion by some estimates.
Taylor Bean was reported to have few, if any, overlays on FHA product, and had garnered a large market share of manufactured homes. Some folks who watch the FHA/VA & Ginnie volumes skyrocket believe that we are NOT facing another subprime debacle. (Let's hope so!) Recently the Secretary of HUD spoke and noted that the "recent originations were performing better than expected". One must remember the source, and also remember that it is recent production, but some believe that this is due to the fact that investors have credit overlays and have raised the FHA underwriting standards. Using basic guidelines to approve government loans would probably result in a much lower credit quality, so most, if not all, investors require substantially higher credit scores than are required, along with lower DTI ratios. A lesson from TBW...
National Mortgage News reports that "Deutsche Bank is beginning to make a run at non-bank mortgage lenders, offering them warehouse lines of credit but also requesting that they sell their loans to the bank on a correspondent basis, according to investment banking sources

Friday morning, after the auctions were wrapped up, we had some economic news. Industrial Production and Capacity Utilization came out less than expected, but still increased for the first time since late last year due in part to "Cash for Clunkers". We also had the University of Michigan Consumer Confidence number, which dropped from 66 to 63.2 this month instead of increasing as some thought it would. And given that one component of it is one of 10 leading economic indicators, watch out. Regardless, these signs of a weaker economy caused the bond market prices to rally, leading to lower rates.

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This week, as summer vacation season continues, we'll see the usual rash of economic releases. Today we have the Empire State Manufacturing number, tomorrow New Residential Construction and the Producer Price index, nada on Wednesday, on Thursday the usual Jobless Claims and the Philly Fed, and then on Friday we wrap up with Existing Home Sales. Ahead of that, we find the 10-yr Treasury up.625 in price and yielding 3.48%, and mortgage prices better by.250.

Here is a little something someone sent me that is indisputable mathematical logic
This is a strictly mathematical viewpoint...it goes like this:

What Makes 100%? What does it mean to give MORE than 100%? Ever wonder about those people who say they are giving more than 100%? We have all been to those meetings where someone wants you to give over 100%. How about achieving 103%? What makes up 100% in life?

Here's a little mathematical formula that might help you answer these questions:

If:
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

is represented as:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26.

Then:

H-A-R-D-W-O-R-K
8+1+18+4+23+15+18+11 = 98%

and

K-N-O-W-L- E-D-G-E
11+14+15+23+12+5+4+7+5 = 96%

But,
A-T-T-I-T-U-D-E
1+20+20+9+20+21+4+5 = 100%

And,

B-U-L-L-S-H-I-T
2+21+12+12+19+8+9+20 = 103%

AND, look how far ass kissing will take you.
A-S-S-K-I-S-S-I-N-G
1+19+19+11+9+19+19+9+14+7 = 118%

So, one can conclude with mathematical certainty, that While Hard work and Knowledge will get you close, and Attitude will get you there, its the Bullshit and Ass kissing that will put you over the top.

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