San Diego, California Mortgage Market Update

San Diego Property Re-Assesment Tax Relief Assistance Services

                                 Property Tax Relief
Do you feel your property taxes are too high? Did you know that with a letter and some information provided by a Real Estate Broker you can request your property taxes to be reduced? Under California State Law (Proposition 8) a temporary reduction in assessed value can be made when the market value falls below the assessed value.

Call for more information and a free analysis of your property taxes.
Toll free 888-503-0113

We are a California Real Estate Broker and the San Diego property value specialists.We will do a free comp check to see if you qualify for a property tax reduction.

We will:
-Do an on-the-spot analysis to see if you can save money on your property taxes
-Perform a Free Comp check
-Save you hundreds of dollars on your tax bill

*No Obligation
*Call now toll free 888 503 0113
*Act Now! Valid only until May 15
*Have your tax statement ready and Call Now!

Toll free 888 503 0113 Axis Real Estate, Inc.
5380 Clairemont Mesa Blvd # 204 San Diego, CA 92117

PROPERTY TAX RELIEF County Assessor, Gregory J. Smith, wishes to notify property owners that tax relief is available if their property's market value has fallen below its assessed value. Your property's assessed value is shown in the upper right hand comer of your current tax bill.

Under State law, (Proposition 8) a temporary reduction in assessed value can be made when the market value falls below the assessed value. Once reduced, the Assessor's Office must then annually review the value of the property. When the property values increase, the assessed value will also be increased but no higher than the original assessed value (plus the annual CPI increase, not to exceed 2%, as required by Proposition 13).

Market Happenings:

Initial claims for unemployment benefits jumped 19K to 373K : in the holiday week of February 23. While the holiday serves as a rough rationale for the lift the upward trend speaks for itself. Trade has been boosted further, albeit briefly, as data shows nothing good. The jobless claims were higher than expected along with upward revisions on the back months while GDP was also worse. The buck remains a problem, actually spurring further interest in the "safety" bid in bonds and Agency MBS. With the stock market down 66, Fed speak making no bones about it’s intention to cut in March and the feeble economic data to back it up, Mortgage traders and investors are in buy mode expecting interest rates to slip further. Currently FNMA 5.0% coupons are up 26 ticks (+28/32) while 5.50% are up 19 (+21/32). Expect improved lender pricing again today as the roller coaster ride continues. Lower notes rates will improve as much as 80 bps, dropping to roughly 50 bp better is you hit the high end of the note rate spectrum.

Industry News:

Fannie Takes $3.6B 4Q Loss

Fannie Mae has reported a $3.6 billion loss for the fourth quarter and a $2.1 billion loss for 2007, recognizing for the first time a loss on its subprime and alternative-A private-label securities totaling $1.35 billion. The unrealized losses on the $41.4 billion in subprime private-label securities and $32.5 billion in alt-A private-label securities totaled $3.3 billion, the government-sponsored enterprise said in its 2007 annual financial report. Fannie increased its loan loss reserves by $2 billion, and the GSE became more pessimistic in its housing market outlook. The company said it expects house prices to decline 5%-7% this year and projected that its credit loss ratio will be 11-15 basis points. Fannie reported that its single-family guarantee fee income rose 19% in 2007 to $5.1 billion, up from $4.3 billion the previous year, which reflected higher demand for loan guarantees and higher fees. "While we are pleased that demand for our mortgage guaranty businesses has surged as we respond to the market's urgent need for liquidity and stability, this positive trend has been far outweighed by the negative financial impacts of rising defaults, falling house prices, and extraordinary disruptions in the credit markets," Fannie president and chief executive Daniel Mudd said.

Expert: 40% of Subprime Loans Could Default

An estimated 40% of outstanding subprime mortgage loans could go into default over the next three years based on current economic assumptions, according to Michael Bykhovsky, president of Applied Analytics, San Francisco. With an estimated loss severity in the range of 50%, that could lead to $200 billion in additional losses related to defaults on subprime home loans. During a press briefing sponsored by Fidelity National Information Services (the parent of Applied Analytics) at the Mortgage Bankers Association's National Mortgage Servicing Conference, Mr. Bykhovsky said there are an estimated $1 trillion of subprime home loans outstanding. He said he is skeptical of the prospects for term modifications that are being proposed as part of an effort to support subprime borrowers. "It will help, but not hugely," Mr. Bykhovsky said. "A lot of subprime loans will default anyway." Based on assumptions that include two more years of housing price declines, Applied Analytics projects that default rates may not start to trend downward until 2011. That dire outlook reflects the impact of declining home values on outstanding subprime mortgage loans, Mr. Bykhovsky said.

OFHEO Lifting GSE Portfolio Caps

The Office of Federal Housing Enterprise Oversight is lifting the portfolio caps on Fannie Mae and Freddie Mac, which will allow the two government-sponsored enterprises to provide more liquidity to the mortgage market and invest in jumbo mortgages. "OFHEO will remove the portfolio growth caps for both companies on March 1, 2008," OFHEO Director James Lockhart said. The unexpected action gives the GSEs more room to use their new authority to purchase jumbo mortgages and hold them in portfolio until they can securitize the higher-balance mortgages. Mr. Lockhart noted that Fannie and Freddie are filing their 2007 annual financial reports on time, which shows they have made "substantial progress" in fixing their accounting systems and internal controls as specified in separate consent orders. The consent orders also require the GSEs to maintain a 30% capital surplus. The OFHEO director signaled that he will begin discussions with Fannie and Freddie to gradually lower the capital surplus.

Misc:

-- On Today’s date in 1993, a gun battle erupted at a compound near Waco, Texas, when Bureau of Alcohol, Tobacco and Firearms agents tried to serve warrants on the Branch Davidians; four agents and six Davidians were killed as a 51-day standoff began.

-- On Today’s date in 1997, in North Hollywood, Calif., two heavily armed masked robbers bungled a bank heist and came out firing, unleashing their arsenal on police, bystanders, cars and TV choppers before they were killed.

-- Today Auto racer Mario Andretti is 68.

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

January producer prices rose a far stronger than expected 1.0% (7.4% yoy) : as the core component rose 0.4% (2.3% yoy). Foods jumped 1.7% (8% yoy) as energy prices rose 1.5% to leave a 23% gain from a year ago. The annual rise in PPI is the strongest in 26 years and comes from just a 2.3% annual lift in August before energy prices reaccelerated. The 2.3% annual core growth isn't all that concerning given the small amount flowing to consumers where core commodity prices are nearly flat from a year ago. Expect the quarter century high PPI to grab plenty of headlines and discussion in tomorrow's Q&A session of the Fed Chairman's testimony on monetary policy and the economy. The Case-Shiller home price index for 20 cities fell -2.1% in December to leave a -9.1% decline from a year ago : The largest December declines came from San Francisco, San Diego and Phoenix as the annual growth leaders on the downside are Phoenix, Las Vegas and Miami. Three cities show gains over the last year -- Seattle, Portland and Charlotte but the overall trend and the month to month trend for all metro areas appears negative. The market is holding in pretty well, considering the data and extenuating circumstances (supply, auctions). FNMA 5.50% coupons are off only 2 ticks (-2/32) so far. Expect lender ratesheet pricing to be flat to slightly worse than yesterday.

Industry News:

Cuomo Nixing Broker Appraisals?

Fannie Mae and Freddie Mac may stop accepting appraisals ordered by mortgage brokers by Sept. 1 as part of a settlement the two secondary-market agencies are negotiating with New York Attorney General Andrew Cuomo. In selling loans to Fannie and Freddie, lenders would have to certify in representations and warranties that they did not rely on appraisals provided by the brokers. "This could, in effect, require lenders to always secure their own appraisal of any property purchased through a broker," according to an outline of the "talking points" obtained. The talking points also show that the AG wants mortgage lenders to curtail their use of in-house appraisers or subsidiary appraisal firms. The settlement talks stem from the New York AG's lawsuit against First American's appraisal unit, which allegedly provided inflated appraisals to one of Fannie's and Freddie's large customers.

RealtyTrac: New Foreclosures Increase

RealtyTrac, an online foreclosure marketplace based in Irvine, Calif., has reported that new foreclosure filings rose 8% in January and were 57% higher than the level recorded a year earlier. The company's U.S. Foreclosure Market Report indicates that 233,001 new foreclosure properties were added to the rolls in January. "January's foreclosure numbers demonstrate that foreclosure activity is continuing on its upward trend, substantially increasing from a year ago in many states," said James J. Saccacio, RealtyTrac's chief executive officer. "However, the 8% monthly increase in January is not as precipitous as the 19% spike the previous month." The company said Nevada, California, and Florida recorded the highest foreclosure rates in January.

Fitch: MI Financial Strength Ratings at Risk

A number of major players in the mortgage insurance industry, especially the stand-alone companies, need to raise substantial amounts of capital or risk downgrades of their insurer financial strength ratings, according to Fitch Ratings. Only two mortgage insurers, Genworth Mortgage Insurance Co. and United Guaranty Residential Insurance Co. (part of American International Group), had their IFS ratings affirmed (at AA and AA-plus, respectively) and their rating outlook held at stable. Fitch placed the IFS and long-term issuer ratings of MGIC Investment Corp., the PMI Group, and Radian Group Inc. on Rating Watch Negative. Unless they raise capital, MGIC and Radian could have their IFS ratings cut by one notch and PMI by two notches, the rating agency said. The fourth stand-alone MI, Triad Guaranty Insurance Co., is already on Rating Watch Negative. Triad has an IFS rating of AA-minus, and Fitch said it believes the company's capital is well below the level needed to maintain it. Unless more capital is raised, Fitch may lower Triad's ratings below the A level, the rating agency said. Fitch took no action on Republic Mortgage Insurance Corp.'s AA IFS rating and negative rating outlook. RMIC benefits from being a subsidiary of Old Republic International Corp., Fitch said.

Misc:

-- Singer Michael Bolton is 55. http://www.orbitcast.com/archives/michael-office_space.jpg

Today's market update brought to you by:

Todd Albrigo
Account Executive
CMG Mortgage, Inc.

Market Happenings:

Treasuries and Mortgages have little to key off of today, so an unholy interest in stocks may serve to tweak prices, while a late session speech by TX Fisher could become a problem for bonds. Fisher won't let any cats out of any bags, tell any tales out of school, unleash any ferrets in the bathroom, but in the meantime, PIMCO has a conference call going off later that might be a real boon for bonds. The well respected men about bond town are looking for rate cuts down to 1%, while the subject matter will be muni auction rate securities, not a happy place, so with nothing else to do trade may use that as a booster. Again no news due today so the stock market teeter tooter effect may be in play. Agency MBS had a choppy but nice rally yesterday and so far this morning trading in FNMA 5.50% coupons are up 2 ticks (+2/32). Look for improved lender ratesheet pricing this morning, around 10 bps for those who re-priced intraday yesterday, near triple that for those who did not.

Industry News:

New Loan Limits Coming by March 7?

The Department of Housing and Urban Development expects to issue the new loan limits for Fannie Mae, Freddie Mac, and Federal Housing Administration loans by March 7, sources indicate. Congress raised the loan limits as part of the economic stimulus bill that President Bush signed on Feb. 13. And lenders are waiting for HUD to compute the new loan limits, which are based on 125% of median home prices, with a $729,750 cap. In a Feb. 20 conference call with industry groups and lenders, HUD officials indicated that separate lists of the higher-priced metropolitan statistical areas would be issued for FHA mortgages and for Fannie and Freddie mortgages. However, FHA lenders were disappointed that HUD has not decided whether the effective date should be determined by the date the lender receives an FHA case number or the date FHA insures the loan. The stimulus bill raised the FHA floor from $201,060 to $271,050, and lenders could begin making those higher-balance loans right now if HUD chose the date the loan is insured.

NAHB: California Lowest on 'Affordability' List

Eight of the nation's 10 least affordable metropolitan areas -- and 24 of the bottom 30 -- are in California, according to the latest quarterly opportunity index compiled by the National Association of Home Builders and Wells Fargo. Although homes were more affordable in all of California's 28 metro areas in the fourth quarter, the cost of housing remains out of reach for mainstream buyers. Statewide, just 18.1% of all the homes sold in the period were affordable by a median-income family, the index indicates. That's up from 12.6% in the third quarter. But it still leaves the majority of Californians way behind when it comes to buying power. Nationally, in contrast, 46.6% of new and existing homes sold in the fourth quarter were affordable to families earning the national median income. "Despite market corrections that have made some areas in California more affordable, the fact remains that the cost of housing in California is out of reach for the vast majority of hard-working families struggling to buy their first home," said Robert Rivinius, president of the California Building Industry Association.

Groups Ask BoA for Foreclosure Moratorium

Citing allegedly shoddy lending practices by Countrywide Financial Corp., 91 California community groups have asked Bank of America, which is acquiring Countrywide, to declare a moratorium on foreclosures. In a letter drafted by the California Reinvestment Coalition, the groups ask BoA chief executive officer Kenneth Lewis to impose a foreclosure moratorium; modify loans for borrowers in danger of losing their homes to a fixed-rate conventional loan with an interest rate no higher than 6%; and maintain Countrywide's headquarters in Calabasas, Calif., and its loan servicing center in Simi Valley. "Bank of America's acquisition of Countrywide should not be just about profits," said Rhea Serna, the CRC's senior policy advocate. "The merger has the potential to reverse Countrywide's bad deeds and give hundreds of thousands of homeowners the opportunity to stay in their homes."

Misc:

-- On Today’s date in 1732, the first president of the United States, George Washington, was born at his parents' plantation in the Virginia Colony.

-- On Today’s date in 1819, Spain agreed to cede Florida to the United States under the Adams-Onis Treaty.

-- On Today’s date in 1889, President Cleveland signed an omnibus bill to admit the Dakotas, Montana and Washington State to the Union.

-- On Today’s date in 1935, it became illegal for airplanes to fly over the White House.

-- On Today’s date in 1980, the U.S. Olympic hockey team upset the Soviets at Lake Placid, N.Y., 4-3. (The U.S. team went on to win the gold medal.)

-- Today Sen. Edward M. Kennedy, D-Mass., is 76.

-- Today Basketball Hall-of-Famer Julius Erving is 58.

-- Today Actress Drew Barrymore is 33.

-- Today Singer James Blunt is 31.

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

January consumer prices rose 0.4% as the core component rose 0.3% : both slightly above expectations. The gains leave CPI at 4.3% from a year ago -- back at Novembers near term high. The core stands 2.5% higher than a year ago from the 2.1% yoy lows of August and September. More inflation worries as the Fed works to address the broader economic slowing. The detail shows 0.7% January gains in both food and energy as higher medical care costs, PCs and tobacco prices pushed the core higher. Annual revisions reshaped the monthly changes of the last few years but leaves the annual growth unchanged. Yesterday saw agency mortgage backeds getting the you know what kicked out of them giving up as much as 2 points on the lower yielding 4.5% coupon. Investors fear that energy and commodities prices are inducing inflationary headwinds on an already strained economy. In addition, and as evidenced by today’s elevated CPI number, investors worry that the Fed’s recession fighting fire power is being slowly eroded. The Fed will have a harder time reaching a further Fed Funds reduction consensus if their actions are perceived to induce further inflationary pricing pressure. Essentially there is a flip side to Fed rate cuts which is an increased likelihood of inflation. This dichotomous predicament will become a bigger issue for the Fed to overcome if the inflationary economic data persists. Trading today in Agency MBS is off again with FNMA 5.00% of 8 ticks (-8/32) and 5.50% of 2 ticks (-2/32). Expect lender ratesheet pricing to be off from end of day yesterday pricing by up to 25 bps on lower note rates, up to 10 bps lower on higher note rates.

Industry News:

FBR Issues California Home Price Warning

Home prices in California are falling faster than in the last housing downturn (1990-1993) and faster than home price reports indicate, according to a Friedman Billings Ramsey & Co. report. "Most national housing price indices are lagging the actual price declines in this pocket by a wide margin, and it will take another six months before anyone will have any insight into the depth of the crisis," the FBR research report warns. The FBR report on two California thrifts points out that falling prices are making it harder to modify loans, and cure rates on delinquent loans are declining, too. "Additionally, the severity of loan losses has been on the rise, as housing inventory is forcing banks to sell the properties at even further discounted prices," the report says.

Treasury Eyeing Jumbo Securitizations

Treasury Department officials are looking at ways to securitize higher-balance Fannie Mae and Freddie Mac mortgages authorized by the economic stimulus bill so they will have a bigger impact on jumbo mortgage rates. Some market participants say mixing GSE conforming mortgages (that don't exceed $417,000) with a de minimis amount of higher-balance mortgages would make a "more robust" jumbo market, Treasury Secretary Henry Paulson told CNBC-TV. "This is something we are looking at right now and talking about with Fannie Mae and Freddie Mac," he said. The Securities Industry and Financial Markets Association said recently that the higher-balance mortgages securitized by the government-sponsored enterprises should be excluded from to-be-announced pools, which receive the most favorable pricing in the mortgage-backed securities market.

ARM Borrowers Switching to Fixed-Rate Refis

Nine out of 10 adjustable-rate mortgage borrowers chose fixed-rate loans when they refinanced in the fourth quarter, according to Freddie Mac. Of those borrowers who originally had a one-year ARM, 92% chose a fixed-rate mortgage in the second quarter, as did 89% of borrowers who originally had a hybrid ARM, Freddie Mac said in its Refinance Product Transition Report. "The turmoil in the financial markets that started in August and continued through the fourth quarter led most mortgage lending institutions to tighten their underwriting standards, and thus some ARM products were either no longer available or came with more restrictions," said Amy Crews Cutts, Freddie's deputy chief economist.

Misc:

-- On Today’s date in 1962, astronaut John Glenn became the first American to orbit the Earth as he flew aboard the Mercury spacecraft Friendship 7.

-- On Today’s date in 1839, Congress prohibited dueling in the District of Columbia. Talk about big brother limiting our freedoms!! The constituency was up in arms.

-- On Today’s date in 1907, President Theodore Roosevelt signed an immigration act which excluded "idiots, imbeciles, feebleminded persons, epileptics, insane persons" from being admitted to the United States. If the prospective immigrant could not solve at least one side of the Rubik’s Cube, they were sent back to their homeland.

-- On Today’s date in 2003 a fire broke out during a rock concert at The Station nightclub in West Warwick, R.I., killing 100 people and injuring about 200 others.

-- Today Actor Sidney Poitier is 81.

-- Today Newspaper heiress Patricia Hearst is 54.

-- Today Basketball player and Golden State Warrior hater Charles Barkley is 45.

-- Today Model Cindy Crawford is 42

Today's market update brought to you by;

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

The market continues to plumb the depths of price ranges despite better bonds overseas. With an empty calendar today, trade has been left to fixate on inflation data tomorrow, technically bearish momentum potentially overwhelming any bid and the ongoing teeter totter affect of the stock market on debt instruments. With the Dow and NASDAQ doing well so far this morning, bonds and mortgages are faring inversely with FNMA 5.5% coupons trading down 10 ticks (-10/32) since the bell. Expect volatility again as investors have become hyper sensitive to their debt positions, even a butterfly flapping it’s wings in China could create a hurricane of buys or sells here. Mortgage investor ratesheet pricing will be worse today by roughly 25 – 35 bps.

Industry News:

Countrywide's Foreclosures Rise 92%

Countrywide Financial Corp., the nation's largest servicer (with a market share of almost 17%), says its foreclosure rate almost doubled in January from that of a year earlier, according to new figures released Friday. At Jan. 31, 1.5% of the loans in its massive $1.48 trillion servicing portfolio ($21.8 billion) had entered the foreclosure process, a 92% increase from the level of a year earlier. Moreover, 7.5% of loans serviced by Countrywide were 30 days or more late. A year ago the ratio stood at 4.3%. Countrywide would not provide separate figures for subprime foreclosures, lumping all its servicing into one number. As for originations, Countrywide funded $21.8 billion in residential loans during January, a 41% decline from the level of a year earlier. Countrywide, which is being sold to Bank of America, saw its wholesale fundings plunge by 65%. Retail production was off 26%, with correspondent purchases falling 38%. Retail originations totaled $9.4 billion and wholesale just $2.5 billion, with correspondent coming in at $9.8 billion. The company also saw its commercial production plunge to just $50 million, a stunning 92% decline from the same month last year.

Spitzer Sets Deadline for Bond Insurers

New York Gov. Eliot Spitzer has set a three- to five-day deadline for bond insurers hurt by certain mortgage securities exposures to bolster their flagging ratings, according to the Wall Street Journal. A call to the New York insurance department about the deadline had not been returned by deadline time. Mr. Spitzer indicated in congressional testimony Feb. 14 that he feels officials in his state should take the lead in tackling the bond insurance issue because "insurance is regulated by the states, and most of the bond insurance companies are domiciled in and primarily regulated by New York." Moody's Investors Service on Thursday downgraded some ratings of bond insurer FGIC, a New York-based company in which mortgage insurer PMI owns a 42% stake.

2nd Stimulus Includes Housing Provisions

Senate Democrats have crafted a second stimulus bill that includes bankruptcy changes lenders will oppose and a net operating loss carry-back supported by homebuilders. "This package is aimed at the bull's-eye of our economic crisis -- the housing market," said Sen. Charles E. Schumer, D-N.Y. Included in the package was a bill by Sen. Richard Durbin, D-Ill., that would allow bankruptcy judges to restructure subprime mortgages. "Small changes to the bankruptcy code could help 600,000 at-risk families keep their homes," the Illinois senator said. The Mortgage Bankers Association said there is "much in this bill to applaud." However, the MBA served notice that it will oppose the bill because the bankruptcy provision will increase the cost of mortgage credit. The National Association of Home Builders has been pushing for an NOL carry-back. But it wants a tax credit for homebuyers even more. The builders have frozen all political contributions because the first stimulus bill did not include a homebuyers' tax credit.

This Week's Calendar:

Misc:

-- On Today’s date in 1945, during World War II, some 30,000 U.S. Marines began landing on Iwo Jima, where they commenced a successful month long battle to seize control of the island from Japanese forces.

-- On Today’s date in 1942, President Roosevelt signed an executive order that gave the military the authority to relocate and intern U.S. residents, including citizens, of Japanese ancestry.

-- Today Singer Smokey Robinson is 68.

-- Today Singer Seal is 45.

-- Today Actor Benicio Del Toro is 41.

Today's market update brought to you by:

Todd Albrigo
Account Executive
CMG Mortgage, Inc.

Market Happenings:

January retail sales rose 0.3% above expectations and matched the 0.3% rise in ex-auto sales. Gas stations provided a 2% lift (ex-auto/gas was flat). The declines were partly tied to the recession in housing as furniture, electronics and building materials all showed declines. Gains in the staples of clothing, food and health provided the lift along with an 0.6% rise from vehicles (despite the strong decline in the number sold). The unexpectedly improved retail sales hurt prices, with the 10-yr yield now working near 3.7%, but still has not taken out the 3.735% point since its brief trip through last week. Bonds and mortgages have edged back some, as stock indexes are sliding some from their data induced pop, but gave up in light trade. Trade will likely spend another session wandering around in the wake of stock moves, tagging along like Ike, the unwanted baby brother. Outside of that there is little to propel prices with Bernanke's testimony waiting in the wings tomorrow keeping folks sidelined. Currently FNMA MBS are trading off 3 ticks (-3/32). For those lenders that re-priced intraday yesterday, expect pricing to be off roughly 10 bps, those without a re-price yesterday should post roughly 20 bps better.

Industry News:

NAHB Freezes All PAC Contributions

The National Association of Home Builders has frozen all political contributions out of frustration with what it deems feeble efforts by the Bush administration and Congress to stabilize the housing market and stimulate home buying. "More needs to be done to jump-start housing and ensure the economy does not fall into recession," NAHB president Brian Catalde said. "This action [to cease all NAHB Build-Pac contributions] will remain in effect until further notice." Congress recently rebuffed the builders' request to include a tax credit for homebuyers in the recently passed economic stimulus bill. "We need something powerful to stimulate homebuying," NAHB chief economist David Seiders said, particularly for buyers of new homes and inventory. "We've got to get this inventory knocked down or the chances of getting a housing recovery are really tenuous," he said at the builder's annual convention in Orlando, Fla. Mr. Seiders voiced optimism that the housing market will stabilize later this year, which would help the credit markets and the overall economy. But he warned that all bets are off if housing prices continue to drop. "We already have an unprecedented decline in house values," he said.

Top 6 Servicers Agree to Foreclosure Freeze

Six of the nation's largest servicers -- which control nearly 60% of the $9 trillion residential receivables market -- have agreed to participate in a new Bush administration plan to freeze foreclosures for at least 30 days. Dubbed "Project Lifeline," the program affects both subprime and prime borrowers who are in danger of losing their homes. (The effort was actually created by the servicers, but with the blessing of the Treasury Department.) The servicers in charge of these delinquent loans -- including Countrywide Financial, Wells Fargo, Citigroup, and others -- will contact homeowners who are more than 90 days late, freeze the foreclosure process, and then try to work out a solution for the borrower. According to the Quarterly Data Report, the nationwide foreclosure rate on subprime loans is almost 8%.

IndyMac Posts $500M+ 4Q Loss

IndyMac Bancorp Inc., Pasadena, Calif., has reported a net loss of $509.1 million ($6.43 per share) for the fourth quarter, compared with net earnings of $72.2 million ($0.97 per share) one year earlier. For the full year, IndyMac lost $614.8 million ($8.28 per share), the first annual loss in the company's 23-year history. In 2006, it recorded net earnings of $342.9 million ($4.82 per share). IndyMac chairman and chief executive Michael Perry attributed the loss to $863 million in pretax credit provisions and costs during the fourth quarter. Despite the big loss, Mr. Perry said IndyMac's capital levels "continue to exceed the levels defined as 'well capitalized' by our regulators," with a core capital ratio of 6.24% and a total risk-based capital ratio of 10.50%. The company had total operating liquidity in excess of $6 billion. But even though IndyMac has what Mr. Perry termed strong liquidity, it is still suspending its quarterly common stock dividend payments indefinitely. That move, combined with shrinking its balance sheet, will add an additional $400 million to capital.

Misc:

-- On Today’s date in 1920, the League of Nations recognized the perpetual neutrality of Switzerland. Perpetual, no matter what?

-- On Today’s date in 1960, France exploded its first atomic bomb, in the Sahara Desert.

-- On Today’s date in 1980, the 13th Winter Olympics opened in Lake Placid, N.Y.

-- On Today’s date in 2003, Clara Harris, who'd run down her cheating husband with her Mercedes after catching him with his mistress, was convicted by a Houston jury of murder despite her claim that she'd hit him accidentally while in a heartsick daze. (Harris was sentenced to 20 years in prison.). Wow.

-- Today Former test pilot Charles E. "Chuck" Yeager is 85.

-- Today Talk show host and former Mayor of Cincinnati Jerry Springer is 64.

-- Today Singer Robbie Williams is 34

Today's market update brought to you by: 

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

There is news out that Warren Buffett is willing to bail-out muni-bond paper from current insurers. Muni stuff is very unlikely to default, but, with the possibility of losing top ratings, are perhaps most in danger & most likely to spread the misery within communities, rather than within a given business. The lessened risk to municipalities is positive news, hitting bonds. Buffett is not in the business of doing "pro bono" work (CNBC), so he is offering to take on munis, not necessarily anything else. The treasuries got rocked on the news, slammed as the market read this as some light at the end of the tunnel. Dinged by Optimism : The market is getting hit with a loss of mortgage and bond positive catalysts which is likely fueling a little profit taking ahead of data & Bernanke Thurs. Fed-ster Poole talked up the prospects for the economy last night while big banks said they are working on a plan to stem foreclosures. The news flow is providing a little positive juice to equity futures while overnight global bonds saw weakness casting the early trade in a slightly dark light for treasuries. The stimulus package awaiting President Bush’s signature also has debt investors skittish about future returns which is why we have seen sell pressure on Agency MBS so far this morning. Currently FNMA 5.50% MBS are off 9 ticks (-9/32) so expect lender ratesheet pricing to be off 20 -30 bps.

Industry News:

FHA: 15 CA Counties Qualify for Max Loan

Only 15 counties in California will qualify for the maximum $729,750 loan limit under the economic stimulus bill that temporarily increases loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Administration, according to an FHA official. This translates into six to nine metropolitan statistical areas in the lower 48 states where Fannie, Freddie, and FHA lenders will be able to make a $729,750 jumbo loan, one expert said. FHA Director Joanne Kuczma said HUD should be ready to issue guidance on the MSAs affected by the stimulus bill in a few weeks. The mortgagee letter has been crafted, and now it needs to be cleared by the Department of Housing and Urban Development, she told the finance committee of the National Association of Home Builders. The stimulus bill increases the Fannie and Freddie loan limit from a floor of $417,000 to 125% of median home prices in high-cost areas, with a cap of $729,750. The NAHB said it expects this to increase the GSE loan limit in 29 MSAs. Meanwhile, the floor for FHA loans rises from $200,160 to $271,050. Nearly 85% of counties will have a 125% median house price that falls between $271,050 and $729,750, the FHA director said. HUD generally sets the MSA loan limit based on the highest-priced county.

Fitch: MIs Face Continuing Problems

Mortgage insurance companies will be affected "negatively in the years ahead" by continued weakness in the mortgage markets, especially with the poor performance of loans to subprime and alternative-A borrowers, according to a commentary from Fitch Ratings. Specifically, Fitch cites concerns about the book of business for loans originated between 2005 and 2007. "[A] greater percentage of these delinquent borrowers will end up in foreclosure in the years ahead, which will translate into higher claims and losses over this time period," the rating agency said. "Negative net income will have a significant impact on the MIs' ability to internally build their capital bases over the next few years, which is of particular concern given the likely costs and/or challenges to raising external capital in this depressed market environment." While all the MIs Fitch rates have been affected by the poor mortgage market, Fitch noted that the extent of the trouble varies by company, "as each insurer has differing levels of exposure to product sectors (i.e., prime, subprime, reduced documentation, alt-A, or negative amortization), have participated in certain business segments to varying degrees, and have different organizational structures, with some benefiting from diversified parent companies or from MI operations based in international markets."

Fitch Eyes AIG Ratings

The issuer default rating, holding company ratings, and subsidiary debt ratings of American International Group Inc. have been placed on Rating Watch Negative by Fitch Ratings, partly as a result of what it calls AIG's "relatively large exposure" to turmoil in the U.S. mortgage market. Fitch said the actions followed an acknowledgement by AIG in a Feb. 11 filing with the Securities and Exchange Commission that its independent auditor believes the company had "a material weakness in internal controls" as of Dec. 31 related to the valuation of AIG Financial Products Corp.'s super-senior credit derivative portfolio. "Fitch believes the area of AIG most exposed to further deterioration in this market is the credit derivative portfolio within AIG FP, with its large net notional exposure of $505 billion at Sept. 30, 2007," the rating agency said. "Included in this total is $62.4 billion of collateralized debt obligations backed by structured finance collateral, mainly subprime U.S. residential mortgage-backed securities."

Misc:

-- On Today’s date in 1809, Abraham Lincoln, the 16th president of the United States, was born in present-day Larue County, Ky. Happy Birthday Abe.

-- On Today’s date in 1999, the Senate acquitted President Clinton of perjury and obstruction of justice. That was a close one he must of thought.

-- Today Basketball Hall-of-Famer Bill Russell is 74.

-- Today Actress Joanna Kerns (the Mom on the 80’s TV hit “Growing Pains”) is 55.

-- Today Actor-former talk show host Arsenio Hall is 53. Whoop it up!!!

Today's market update brought to you by: 

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Today’s Market Happenings:

As noted for some time, many experts believe that FNMA & FHLMC being able to buy higher loan balances won’t cause a total reversal of the mortgage-banking slump. The higher loans could have fee adjustments, it may expire at the end of the year, and it won’t correct the guideline changes or cause their property value to increase, giving many much-needed equity. The Department of Housing and Urban Development will calculate the new loan ceilings and determine the geographic areas impacted, although most likely they will be based on MSA (Metropolitan Statistical Area). And investors still don’t know what to charge for the higher loan balances, which will be based on whether or not the loans can go into mortgage-backed securities. Regardless, yesterday’s vote was a shot of perceived good news for an industry that hasn’t had much to crow about in the last year.

James Lockhart, the Director of the Office of Federal Housing Enterprise Oversight (who oversees FHLMC & FNMA, government-sponsored enterprises) stated “any increase in the conforming loan limit should be coupled with quick enactment of comprehensive GSE reform…the loan limit provision…would increase the Enterprises risks by allowing them to enter the ‘jumbo’ loan market. It would increase the maximum size loan those GSEs could purchase or guarantee from $417,000, to the lower of 125 percent of median area prices or $730,000, for mortgages originated between July 1, 2007 and December 31, 2008. This change should help lower interest rates on some jumbo mortgages, but other potential implications deserve attention. Jumbo loans would present new risks to the already challenged GSEs. The prepayment and credit risks are different than those of conforming loans. The provision also pushes the GSEs to increase their geographic concentration in some of the riskiest real estate markets. Roughly half of all jumbos are in California.”

Yesterday’s market got seriously hit by some combination of a mediocre 30-yr auction, the European Central Bank’s policy meeting leaving their rates unchanged (suggesting the economy there might be stable or rebounding), a Fed governor’s speech noting signs of possible inflation, and a UBS research report that addressed jumbo loans being eligible for securitization with conforming loans. Today's economic calendar is light, with the focus pretty much on if two Fed speakers later today echo the inflation concerns. The 10-yr, which yesterday jumped from 3.60% up into the mid 3.70’s, is back at 3.68%, and mortgage prices are better by .125-.250.

The $146 billion economic stimulus package approved by the House contains an important provision for homeowners: a one-year increase to $625,000 nationwide and up to $729,000 in high-cost areas such as the San Francisco area in the conforming loan limit for loans that government-sponsored enterprises Fannie Mae and Freddie Mac can purchase. The current limit is $417,000. The house bill seems to indicate that conventional loans will use the same MSAs as FHA loans do and thus have different limits for each MSA. Here is what seems to be floating out there: “Determination of Limits- The areas and area median prices used for purposes of the determinations under subsection (a) shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 202 (FHA section) of this title,” which suggests that both FHA and conventional loan limits will be 125% of median area home price as set by HUD. Moving quickly to get the economic package to President George W. Bush, the House of Representatives passed the bill by 380-34, just hours after the Senate cleared the measure on a vote of 81-16. Bush is expected to sign the bill next week.

* Flagstar advised clients that mortgage insurance is no longer available on stated income cash out refinance transactions, and any pipeline loans must already have a Mortgage Insurance Certification issued in order to close. They will be changing the manufactured housing price adjustment for FHA/VA loans.

* Is the jumbo market looking attractive? In writing about Thornburg, Jeffries Securities said that, “We believe there is an extraordinary opportunity to invest in high-quality mortgages at the moment driven by several fundamental factors…lower funding costs and favorable asset yields will provide significant margin expansion in the first quarter as the company looks to ramp capital deployment…asset yields will likely compress as mortgage products regain favor in the market. However, as this occurs, asset pricing will rise to reflect the increased liquidity, driving up the value of TMA's securities as well as book value.”

* MGIC announced underwriting guideline changes of their own: A-paper guideline changes include “LTVs greater than 95% require a minimum credit score of 680, LTVs 95% or less require a minimum credit score of 620, etc.” Expanded Criteria (A-) guideline changes include “the maximum LTV is 95%, the minimum credit score is 660, and primary residence cash-out refinances require a minimum credit score of 680. (The current maximum LTV of 90% remains.” Reduced Documentation (Alt-A) guideline changes include “the maximum LTV is 90%, the minimum credit score is 660, and at least 50% of qualifying income must come from self-employment (already in place).”

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

The early, much worse than expected release on ISM took many by surprise, including economists. Chatter on the street was "that a representative of ISM mentioned the result inadvertently yesterday in a speech. That's why the release was moved up," says a well connected dealer. The REAL number was the 41.9 print, with the 44.6 being the "new number," a composite, whereas the OLD number, the business activity index, is the headline the market was looking at. Either way it’s measured, both numbers were terrible, the "original" worst since Oct 01, the "newbie," which can only be measured back to Jan 04 (according to Bloomberg data) is the worst on record (of course, everything's relative). Since this ISM number is the only major one to be released on this Super Tuesday, along with its surprisingly weak post, Agency MBS investors certainly are hitting the buy button as this provides the Fed with yet another round of rate cut ammunition that it may use to justify further reductions to Fed Funds at their upcoming March meeting. Currently FNMA 5.50% are up 12 ticks (+12 /32). Expect lender ratesheet pricing to be better by about 30 – 40 bps today.

Industry News:

Citi to Sell or Close FCS

Citigroup, decimated by billions of dollars in write downs on subprime assets, has decided to sell or close its warehouse lending division, First Collateral Services of Concord, Calif. The company has contacted investment bankers about selling the operation, said a source, but so far no official offering book has been circulated. Citigroup did not make a public announcement on FCS but confirmed that it will close the unit unless it finds a buyer.

Few Banks See 'Hope Now' Impact as 'Very Significant'

Over 70% of commercial banks expect the performance of their single-family loan portfolios will deteriorate in 2008, but most don't expect the streamlined loan modification plan endorsed by the Hope Now Alliance will have a significant impact on their loan mitigation efforts. The vast majority of banks expect to take a "case-by-case" approach to loan modifications, according to a Federal Reserve Board survey of senior loan officers. Only six of the 45 banks surveyed in January said streamlined modifications endorsed by the Hope Now alliance would play a "very significant" role in their attempts to prevent foreclosures. A large number of respondents indicated they expect to refinance subprime borrowers into Federal Housing Administration or conventional loans. More than 65% of respondents also anticipate using short sales or deed-in-lieu of foreclosure as a significant loss mitigation strategy, the Fed said.

FHA Premiums May Rise

The Federal Housing Administration will have to increase its standard mortgage insurance premiums, according to the President's 2009 fiscal year budget, unless Congress passes FHA reforms that allow the agency to charge risk-based premiums. Budget documents show that FHA is in trouble and expects to pay $8.4 billion in claims due to defaulted loans in FY 2008, up from $5.1 billion in FY 2007. The Office of Management and Budget estimates that FHA will pay $9.8 billion in claims in FY 2009. "Because of deteriorating market conditions, as well as adverse loan performance," FHA will use its authority to increase the upfront premium by 45 basis points to 1.95% and the annual premium by 2 bp to 52 bps. The President's budget also suggests that FHA should stop insuring mortgages with seller-financed down payment assistance unless Congress wants to provide funding to cover the losses. FHA has tried to curtail the down payment assistance programs run by nonprofit groups for years. But the courts and Congress have blocked the agency's efforts despite the high default rates on those loans. "The Budget proposes no new loan guarantees under this program; and provides no funding for its credit subsidy costs," the budget says.

Misc:

-- On Today’s date in 1783, Sweden recognized the independence of the United States. Thanks again Sweeden.

-- On Today’s date in 1917, Mexico's constitution was adopted.

-- On Today’s date in 1973, services were held at Arlington National Cemetery for Army Lt. Col. William B. Nolde, the last official American combat casualty before the Vietnam cease-fire.

-- Today Baseball Hall-of-Famer Hank Aaron is 74.

-- Today Actor-comedian Tim Meadows is 47.

-- Today Singer Bobby Brown is 39.

Today's market update brought to you by:

Todd Albrigo

Market Happenings:

Factory orders rose 2.3% in December to leave a new record high : the growth was smaller than expected as durable goods orders were revised down to a strong 5% as nondurable goods orders fell -0.4% after three months of gains averaging 2.3%. Ex-defense orders rose 1.2% as ex-transportation rose 0.7%. The gain leaves a 6.1% rise from a year ago as core capital goods (the proxy of business capital investment) have risen just 1.5% yoy. Great news for manufacturing as orders continue on an upward trend. December shipments (sales) fell -0.3% as inventories rose 0.8%. A fresh surge in financial-sector layoffs contributed to a 69% increase in corporate job-cut announcements in January, according to the latest tally compiled by outplacement firm Challenger Gray & Christmas released Monday. U.S. corporations announced 74,986 job reductions last month, up from December's 44,416 and 19% higher compared with the previous January, Challenger Gray reported. The financial sector cut 15,789 positions, accounting for more than a fifth of the documented job cuts for January. Job cuts remain below levels seen in the 2001 recession, noted John Challenger, CEO of the firm that bears his name. The market is focusing on the stronger than expected Factory Order number for December as the bullish posting has Agency MBS investors hitting the sell button more often than not. FNMA 5.50% coupons are trading down 5 ticks (-5/32) which should translate into lender ratesheet pricing about 20 – 30 bps worse than yesterday.

Industry News:

Mortgage Jobs Declined 115K in '07

Mortgage companies cut 5,600 full-time employees from the payrolls in December to end a terrible year in which 114,600 workers -- nearly a quarter of the industry's work force -- lost their jobs. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell from 374,600 in November to 369,000 in December -- down 23.7% from that of December 2006. (The BLS revised all the employment numbers in its latest report.) The mortgage industry started the year with 483,600 employees. But the subprime meltdown that sent the credit markets reeling forced scores of mortgage companies to shut their doors and others to cut their staffs. Industry employment may stabilize or even rise in coming months, however, due to an increase in refinancings and hiring by servicers to deal with rising defaults and resets of adjustable-rate subprime mortgages.

Beazer Shuts Down Mortgage Subsidiary

Beazer Homes USA, Atlanta, is discontinuing the origination of mortgages through its troubled Beazer Mortgage Corp subsidiary. As a result, it has ended its mortgage services relationship with Homebuilders Financial Network LLC. Instead, the company has entered into an agreement with Countrywide Financial Corp., Calabasas, Calif., under which the latter will be marketed to Beazer homebuyers as the company's preferred mortgage lender. "Given the increasing complexities in mortgage financing today, we believe working with an established leader in mortgage lending makes the most sense for our homebuyers and our business," said Beazer president and chief executive Ian McCarthy. An investigation by the audit committee of Beazer's board of directors found evidence that employees of Beazer Mortgage violated Department of Housing and Urban Development regulations, particularly in relation to down payment assistance programs, in certain Federal Housing Administration-insured loans dating back to at least 2000. Beazer Homes also said it is exiting the homebuilding business in Charlotte, N.C.; Cincinnati/Dayton, Ohio; Columbia, S.C.; Columbus, Ohio; and Lexington, Ky.

FBR: Subprime Defaults Accelerating

Defaults on securitized subprime mortgage loans are accelerating and hit a new high of 21.3% in November, up 188 basis points from the level of the previous month, according to a report by Friedman Billings Ramsey Investment Management. The default rate on these non-agency loans has accelerated "briskly" since August, according to the Structured Finance Insights report, which indicates that the default rate on subprime mortgages has doubled since November 2006. FBRIM managing director Michael Youngblood attributes the rapidly deteriorating performance to falling house prices and weakening labor market conditions that are "characteristic" of a recession. The default rate on alternative-A loans rose 31 bps to 5.7% in November, up from 1.4% in November 2006. Meanwhile, the foreclosure rate on subprime mortgages stood at 8.6% in November and at 2.7% on alt-A mortgages.

This Week's Calendar:

Date	ET	Release	For	Actual	Briefing.com	Consensus	Prior	Revised From
Feb 04	00:00	Auto Sales	Jan	5.1M	5.2M	5.2M	5.5M
Feb 04	00:00	Truck Sales	Jan	6.6M	7.3M	7.2M	6.9M
Feb 04	10:00	Factory Orders	Dec	2.3%	2.8%	2.0%	1.7%	1.5%
Feb 05	10:00	ISM Services	Jan		52.5	53.0	54.4
Feb 06	08:30	Productivity-Prel	Q4		0.0%	1.0%	6.3%
Feb 06	10:30	Crude Inventories	02/02		NA	NA	NA
Feb 07	08:30	Initial Claims	02/02		350K	NA	375K
Feb 07	10:00	Pending Home Sales	Dec				-2.6%
Feb 07	15:00	Consumer Credit	Dec		$12.0B	$8.0B	$15.4B
Feb 08	10:00	Wholesale Inventories	Dec		0.2%	0.4%	0.6%

Misc:

-- On Today’s date in 1783, Britain declared a formal cessation of hostilities with its former colonies, the United States of America.

-- On Today’s date in 1861, delegates from six southern states met in Montgomery, Ala., to form the Confederate States of America.

-- On Today’s date in 1974, newspaper heiress Patricia Hearst was kidnapped in Berkeley, Calif., by the Symbionese Liberation Army.

-- Today Rock singer Alice Cooper is 60.

-- Today Singer Natalie Imbruglia is 33.

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.

Market Happenings:

January payrolls fell -17K after December's were revised sharply higher to 82K. The -51K decline from the goods producing side (construction, manufacturing) was stronger than the modest 34K rise from the service side. Government payrolls fell -18K so private payrolls did rise, but only 1K. However, the unemployment rate fell 0.1% to 4.9% after the large December jump. Hourly earnings rose 0.2% to a 3.7% annual rate as the workweek edged lower to 33.7 hours. The decline in payrolls is disturbing given their broad-based nature. As noted earlier, the first back to back declines in payrolls marked the start of the last two recessions. January ISM rebounded back above flat to 50.7: given the new weights and seasonal adjustments. The revised index stood at 48.4 in December with the January level the highest since August. New orders remained below water at 49.5 as production jumped to 55.2. Export orders were also strong at 58.5. Prices paid rose to 76.0 but there isn't any inflationary pressures coming from manufacturing given the weak pricing power. ISM says the mark consistent with a decline in overall economic growth (not just manufacturing) is 41.1. Construction spending fell -1.1% in December: the decline came from residential (-2.8%) and public spending (-1.5%) as business structural investment rose 1.3%. The annual growth better reflects the trends. Residential is down -20% from a year ago as business investment is up the same 20%. Public spending has risen 10% from a year ago. So a mix of news has the mortgage marked more or less muted for a payroll day. FNMA 30 YR 5.5 MBS are trading up 4 ticks (+4/32) after the slew of economic data was released. Expect ratesheet pricing to be about 20 or so bps better than yesterday. Also expect 1 MO LIBOR based products to have an amazing rate as the index has fallen over 100 bp in the past month and it now sits at around 3.200%!!!

Industry News:

Mortgage Bond Insurer Takes Huge 4Q Loss

MBIA Inc., whose credit guarantees stand behind billions of dollars in subprime mortgage bonds, posted a $2.3 billion loss in the fourth quarter, blaming the problem partly on the performance of second liens and "CDO squared" transactions. In the fourth quarter alone, it marked down the value of insured credit derivatives by $3.4 billion, saying the move resulted "from wider spreads for CMBS and RMBS collateral" and downgrades related to bonds held in collateralized debt obligation structures. CDOs include tranches of subprime asset-backed securities. MBIA also announced that it has moved to shore up its capital, selling $500 million in common stock to investment fund Warburg Pincus Inc. If MBIA's credit ratings slip, holders of CDO and ABS bonds it insures may be forced to take writedowns on those securities.

S&P: Downgrades May Affect 'Smaller Players'

The largest global financial institutions are not likely to be significantly affected by the huge number of downgrades of subprime securities announced by Standard & Poor's Jan. 30 (see above item), but they could boost losses among "smaller players," the rating agency says. S&P said it believes that the total losses for financial institutions will eventually reach more than $265 billion. "In our opinion, the downgrades of mortgage securities could lead to the realization of these losses, especially among some of the smaller players that have yet to feel the full extent of the value impairments on securities held in their available-for-sale securities portfolios," S&P said.

Fannie: Mudd's Pay Totals $12.2M for '07

Fannie Mae president and chief executive Daniel Mudd will receive total compensation of over $12.2 million for 2007, the vast majority of it coming from a performance bonus and incentive award, Fannie Mae has announced. The government-sponsored enterprise said its board of directors has established Mr. Mudd's 2007 bonus at $2,227,500 and his 2007 long-term incentive award at $9 million. Added to his base salary of $990,000, the bonus and incentive award bring his total compensation to $12,217,500 for last year. Fannie said Mr. Mudd's compensation for 2006 totaled $14,449,947.

Hedge Fund Raps BoA/Countrywide Deal

The acquisition of Countrywide Financial Corp. by Bank of America Corp., Charlotte, N.C., has drawn opposition from SRM Global Fund, a Cayman Islands-based hedge fund that controls 5.19% of Countrywide's stock. In a Securities and Exchange Commission filing, SRM said "the merger agreement does not provide sufficient value to holders of [Countrywide's] common stock." The company also issued a news release saying it will vote against the merger and that the Calabasas, Calif.-based Countrywide is "strong and will rapidly return to profit on a standalone basis." If this is not true, SRM said it wants to know what management did to maximize shareholder value. As the deal now stands, SRM said Countrywide shareholders would get less than $8 dollars per share. But even after the fourth-quarter loss, it maintained that Countrywide still has a book value "in excess of $20 per share, in addition to its substantial franchise value as the leading mortgage business in the United States and its insurance business." It added that it is not surprised that BoA will proceed on the deal because it is paying a substantial discount to book value. SRM also asked the SEC to investigate movements in Countrywide's stock price in the days before the merger was announced.

Misc:

-- On Today’s date in 2003, the space shuttle Columbia broke up during re-entry, killing all seven of its crew members.

-- On Today’s date in 1920, the Royal Canadian Mounted Police came into existence as did their fantastic name.

-- Today Actor Sherman Hemsley is 70. “Hey Weezie!”

-- Today Lisa Marie Presley is 40

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.