Treasury auction met higher demand than opposing opinions expected and in turn MBS recovered from earlier lows. The FNMA 30 year 3.5% coupon ended the day at 100.66 – up 19bp.
.
Stock slid on news that existing home sales plummeted in July.
Contrary to the
op-ed last week in the WSJ, The Great American Bond Bubble , we are heading into a depression. How painful will it get before mainstream and our policy makers lay down their foolish ideals, accept the truth and respond appropriately?
Make no mistake – there is an appropriate response that can fix our economy and fix it fast. Our only constraints are political.
This post is in rebuttal to today’s Wall Street Journal op-ed by Jeremy Siegel and Jeremy Schwartz fashionably titled ‘The Great American Bond Bubble’. For anyone who is unable to view this WSJ piece in its entirety don’t feel left out! Mr. Siegel was a guest on CNBC today –watch it here.
Going to have dinner, go swimming then will come back and finish my rebuttal. It might be long, could be short. Will post it here between now and Friday afternoon. Your interest is appreciated. lol Interest. Appreciate. Get it?
Today's Clusterstock Chart of the Day and it's coinciding narrative
Why the thirst for government securities? Well, government has a big thirst for money, and in this environment, it's nice to put money with an entity that you're sure can pay you back.
Well, government has a big thirst for money
A sovereign government that spends by marking numbers up in your bank account and taxes by marking those same numbers down a notch, thirsting for something only it can create.
Does Parker Bros somehow prefer $500 bills over all the rest?
Been to a concert lately? How much did you pay for the tickets? And what did the host do with the tickets you gave in exchange for entry?
Think about it and ask what, if anything, does it mean?
This is an excerpt from an article in the December 2009 issue of RealtyTrac. Read all of it here.
UMBA
The Upfront Mortgage Brokers Association (UMBA) has just 80 individual members and 10 company members. Based on the ideas of Jack Guttentag, aka “The Mortgage Professor,” a nationally syndicated real estate columnist and a Professor of Finance Emeritus at Wharton, the group has a code of ethics that actually means something.
For instance, members pledge that “the broker will endeavor to act in the best interests of the customer.” Nothing fuzzy about this, it creates a fiduciary obligation to represent borrowers. Members also promise to “establish a price for services upfront, in writing, based on information provided by the customer.”
“The price,” says the UMBA code, “may be a fixed dollar amount, a percent of the loan, an
hourly charge for the broker's time, or a combination of these. The price or prices will cover all
the services provided by the broker. If the broker charges a loan processing fee, the amount
will be disclosed to the customer, regardless of whether it is paid directly to the broker or to a
third party.”
Lastly, with UMBA members hidden yield-spread premiums are out. Not only are such premiums disclosed, they're credited to borrowers.
“If the broker's fee is 1 point, for example,” says UMBA, “and the broker collects 1 point from the lender as a 'yield spread premium', the broker either charges the customer 1 point and credits the customer with the yield spread premium, or charges the customer nothing and retains the yield spread premium.”
You can see the benefit of the UMBA approach. If it makes sense to have a buyer broker representing you as a real estate purchaser, why would it not make sense to have a mortgage broker protect your interests when you get a loan?
UMBA is small and not well known, but the way things are going it's the future of mortgage brokerage. Members pledged to its standards are listed on its website, UpfrontMortgageBrokers.org
____________________
Peter G. Miller is syndicated in more than 100 newspapers and operates the consumer real estate site, OurBroker.com.
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