San Diego, California Mortgage Market Update

Market Happenings:

Bid on Low Confidence : The confidence number was low, 62.3, but not quite as bad as anticipated 61, while the components such as labor conditions worsened with jobs "hard to get" showing the 3rd straight increase along with lowered expectations for income growth. Survey participants showed plans for taking vacations over the next 6-mos dropped to a 30-yr low. Prices are pushing back, with action spotty, while falling stocks may help, trade will be hard pressed to get much more here with the calendar weighing. The Fed is discussing the possibility of paying interest on commercial bank reserves to alleviate credit problems, according to WSJ. The FOMC will consider the issue at the meeting, tweaking its tools to help banks lend with lessened concerns over counterparty risk, but any actual move in that direction would require congressional involvement. As equities are dropping this morning with the Dow down over 50 pts, so money is be put to work in Agency Mortgage Backed’s albeit cautiously leading up to Fed day. Currently FNMA 5.00% are trading up 8 ticks (+8/32) which should net lender pricing improvements of up to 25 bps over yesterday’s ratesheets.

Industry News:

RealtyTrac: Foreclosures Jump 23% in 1Q

Nearly 650,000 foreclosure filings were reported nationwide in the first quarter, up 23% from those of the previous quarter and 112% from a year earlier, according to RealtyTrac, an online foreclosure marketplace based in Irvine, Calif. The nation's quarterly foreclosure rate was one filing for every 194 households, the company said in its Q1 2008 U.S. Foreclosure Market Report. (Foreclosure filings include default notices, auction sale notices, and bank repossessions.) "Foreclosure activity in the first quarter increased on a year-over-year basis in 46 out of the 50 states and in 90% of the nation's 100 largest metro areas, demonstrating that most regions of the country are seeing more foreclosures," said James J. Saccacio, chief executive officer of RealtyTrac. "In some areas there are also some unusual, nonmarket factors impacting the foreclosure numbers. For example, the city of Philadelphia in late March issued a temporary moratorium on all foreclosure auctions for April, and the city has since adopted a program that will delay foreclosure proceedings on owner-occupied properties until the owners have met face-to-face with lenders to attempt a loan workout plan that would prevent foreclosure."

Census Reports 1Q Rise in Vacant Homes

The Census Bureau has reported that the inventory of vacant homes listed for sale rose to 2.3 million in first quarter, up 4.6% from that of the previous quarter, and that the homeownership rate was unchanged. Listings of vacant homes rose dramatically in 2006 to 2.1 million, and this overhang on the real estate market continues to exert downward pressure on house prices. Since 2006 it has remained above the 2 million mark, and over the past two quarters there has been an uptick in listings -- probably reflecting bank sales of more foreclosed properties. The Census Bureau report also indicates that the homeownership rate held steady at 67.8% in the first quarter. However, the rate is down from 68.4% in the first quarter of 2007. The homeownership rate for blacks fell from 47.7% in the fourth quarter to 47.1% in the first quarter, while the rate for Hispanics rose from 48.5% to 48.9%.

Alliance: FHA Loans Fastest-Growing Product

Federal Housing Administration loans have become the fastest-growing product for an alliance of 110 local and regional mortgage bankers, constituting 35% of their loan volume in March, according to Lenders One chief executive president Scott Stern. Back in January 2007, FHA lending represented only 1% of their loan production. "Due to the tremendous growth, we refer to FHA as the 'Loan Product of the Year'," Mr. Stern said. The Lenders One CEO said he believes that FHA production could hit 40% of originations if Congress makes the increase in loan limits permanent and does not raise the FHA down payment requirement. Alliance members originated $40.4 billion in residential mortgages in 2007, and they are currently originating $3.3 billion to $3.5 billion a month.

Misc:

-- On Today’s date in 1865, John Wilkes Booth, the assassin of President Lincoln, was surrounded by federal troops near Bowling Green, Va., and killed.

-- On Today’s date in 1986, the world's worst nuclear accident occurred at the Chernobyl plant in the Soviet Union.

-- On Today’s date in 1993, Conan O'Brien was named to succeed David Letterman as host of NBC's "Late Night" program. Pimpbot was born soon thereafter.

-- Today Actress-comedian Carol Burnett is 75.

-- Today Actor Jet Li is 45.

Today's market update brought to you by:

Todd Albrigo

Account Executive

CMG Mortgage, Inc.