Headlines...

NEW -> Contingent Buyer Assistance Program
<p>From http://latimesblogs.latimes.com/laland/2008/01/la-foreclosures.html</p>

<p><img alt="" src="http://latimesblogs.latimes.com/photos/uncategorized/2008/01/23/34875312_2.gif" /></p>
 
<p>Tentative Deal Reached on Economic Stimulus Package</p>

<p><a href="http://www.washingtonpost.com/wp-dyn/content/article/2008/01/24/AR2008012400532.html?hpid%3Dtopnews&sub=AR">http://www.washingtonpost.com/wp-dyn/content/article/2008/01/24/AR2008012400532.html?hpid%3Dtopnews&sub=AR</a></p>

<p>The package would temporarily increase the size of jumbo mortgages that can be bought by government-sponsored <a target="" href="http://projects.washingtonpost.com/post200/2007/FNM/">Fannie Mae</a> and <a target="" href="http://projects.washingtonpost.com/post200/2007/FRE/">Freddie Mac</a>, from $417,000 to as much as $625,500 in high-cost housing markets. </p>
 
Is the conforming news as bad as it seems to me?





Conforming not only lowers rates but has more lax lending standards, right?





It was one of those things that I thought by the nature of how it works meant that house prices had to fall a lot.
 
My understanding is that conforming allows lenders to write loans to a universal set of standards ("conforming" to those standards), with the understanding that the loan will then be eligible for purchase by one of the GSE's.



The standards have become much tighter recently, especially in regards to the relationship of Credit Score to LTV (ie you wont be able to qualify for 90% to 95% LTV if you have a credit score in the low 600's); and Debt to Income.



Because these loans conform to the standard for GSE purchase, there is less risk to the lender that the loan will be unsaleable on the secondary market, which would force the lender to hold onto it.



Due to the minimized risk, lenders will underwrite these loans at a lower rate than non conforming loans that they might have to sit on.



In terms of the impact on the local market, a raise in the conforming limit will not help the key issues:



High debt to Income caused by high prices

High LTV caused by high prices

Current homeowners that are upside down.



This will help buyers who can already qualify for the home that they like by lowering the interst rate.



If there is any piece of news that foreshadows the near term future for OC, it was the report on CR that a high percentage of loans that had been modified already were still going into default.
 
<p>Calif. home prices off 17.4%, nation’s worst”</p>

<p><a href="http://lansner.freedomblogging.com/2008/01/24/calif-home-prices-off-174-nations-worst/">http://lansner.freedomblogging.com/2008/01/24/calif-home-prices-off-174-nations-worst/</a></p>

<p>California -17.40%</p>

<p>LA/OC -13.61%</p>
 
<p><strong>California Home Sale Price Medians by County and City


Home Sales Recorded in December 2007 </strong></p>

<p><a href="http://www.dqnews.com/ZIPCAR.shtm">http://www.dqnews.com/ZIPCAR.shtm</a></p>

<p>







County/City/Area

# Sold

Dec. 2007

Dec. 2006

% Change







</p>

<p>







Orange County

1,472

$560,000

$635,000

-11.81%







</p>

<p>









<p>IRVINE</p>



165

$660,000

$736,250

-10.36%







</p>
 
<a onclick="toggle_update(this);return false;" href="http://feeds.feedburner.com/~r/RonPaul2008/~3/222418005/ron-paul-unveil.html">Ron Paul Unveils a REAL Economic Stimulus Plan</a> (1/24/08)



<p>Four-pronged approach will strengthen the economy by reforming taxes, cutting spending, improving monetary policy and eliminating burdensome regulations





FOR IMMEDIATE RELEASE</p>

<p>January 24, 2008</p>

<p>“This plan is more than just a band-aid for our economy; it fundamentally reforms four areas where government policies are damaging our national economy. When enacted, my plan will provide both short-term stimulus, and lay the groundwork for long-term prosperity.”</p>

<p>The comprehensive economic revitalization plan is available online at: <a href="http://www.ronpaul2008.com/Prosperity">http://www.RonPaul2008.com/Prosperity</a>.</p>
 
<p><strong>Family pets fall victim to subprime crisis </strong></p>

<p>by Mira Oberman <em class="timedate">Fri Jan 25, 9:26 AM ET</em> </p>



<p>CHICAGO (AFP) - Forget about the lost furnishings and finances, the most pitiful victims of the subprime mortgage crisis rocking the United States are the family pets. </p>

<p>Shelters across the country have seen sharp upticks in the number of people giving up their pets in recent months because they have been forced out of their homes.</p>

<p><a href="http://news.yahoo.com/s/afp/20080125/ts_alt_afp/uspropertyfinanceanimals">http://news.yahoo.com/s/afp/20080125/ts_alt_afp/uspropertyfinanceanimals</a></p>

<p>Okay, maybe if there's such a thing as an innocent victim, then these poor animals would qualify. As it turns out, when the stuff really hits the fan, these family pets aren't actual members of the family. An absolute shame.</p>
 
<a href="http://mortgage.freedomblogging.com/2008/01/25/fed-could-be-forced-to-raise-rates-in-late-08/"><strong>Fed could be forced to raise rates in late ‘08</strong></a>





Andy Policano, dean of UCI’s Merage School of Business, said the Federal Reserve might have to raise interest rates in the latter part of 2008 to quell inflationary pressures. ...
 
<a href="http://tinyurl.com/39sbo8">Europe is taking a sh*t too</a>.


<em>


European shares moved down sharply on Monday morning, in an echo of last week's early action, as worries about economic growth and financial sector transparency after Societe Generale's fraud loss continued to depress equity markets.





</em><a href="http://bigpicture.typepad.com/comments/2008/01/conspiracy-theo.html">Could it be a conspiracy</a>?


<a href="http://tinyurl.com/3yqeof">


Or... is it in the details</a>?





<a href="http://bigpicture.typepad.com/comments/2008/01/pre-state-of-th.html">Maybe, it is how the people feel about the country</a>?





<img src="http://bigpicture.typepad.com/photos/uncategorized/2008/01/24/sotu_poll.png" alt="" />





<a href="http://online.wsj.com/article/SB120114219542012287.html">I love volatility</a>.





<a href="http://www.nakedcapitalism.com/2008/01/ben-stein-tells-us-its-all-traders.html">Of course, according to Ben Stein, it is all the traders fault</a>. Oops... sorry Ben, whining about how you don't get it, does help, but thanks anyway.
 
Hmmm, looking at the futures as of 8:03 am EST on Bloomberg, the Dow is only down 49 points. That doesn't seem like anything to worry about. Also, I find it hard to believe that the market will move up or down in any meaningful way before 11:15 am PST on Wednesday.
 
<p><em>"The December reading of the annual rate of new home sales is scheduled to be released Monday at 10 a.m. by the Commerce Department. In November, the annual rate stood at 647,000 sales. For December, economists expect a slight decrease to a rate of 645,000 sales per year".</em> </p>

<p>Let's see how they do with their guess....a drop of only 2K house sales seems a little optomistic.</p>

<p><strong><em>"Global turmoil continues to wreak havoc with U.S. markets". </em></strong></p>

<p><em>"Around the world, equities declined on continued conern over the U.S. economy. In Japan, the Nikkei fell 4.0%, while Hong Kong's Hang Seng index lost about 4.3%. Europe did not fair much better. In the U.K., the FTSE slipped 2% in afternoon trading, while Germany's DAX stood down more than 10%". </em></p>

<p><a href="http://www.smartmoney.com/bn/index.cfm?story=20080128090512">Global Selloff Hits Home (Bank of America Corp. (BAC),Countrywide Financial Corp. (CFC),Halliburton Co. (HAL),McDonald's Corp...</a></p>
 
Ben Stein has been very strange through this whole mess. He wrote at length about prior real estate bubbles, and he established a reputation in the process. This time he has completely and totally missed it. I suspect he must have l lot of real estate positions, and his emotions are causing him grief over this whole situation.
 
<p><strong><em>New home sales: Biggest drop ever</em></strong></p>

<p><a href="http://money.cnn.com/2008/01/28/news/economy/newhomes/index.htm?cnn=yes">New home sales pace in biggest annual drop ever - Jan. 28, 2008</a></p>

<p><em>"The weak December sales left full-year new home sales at 774<strong>,</strong>000, down 26 percent from the 1.05 million sales in 2006. That was the biggest drop since the government started tracking new home sales in 1963, surpassing the 23 percent decline posted in 1980".</em></p>

<p> </p>
 
<p>Quote of the week: "Bernanke has the only pooper-scooper in town, but it is too small for the job."</p>

<p>Goodbye to the Bulls?</p>

<p><a href="http://www.newsweek.com/id/104334/page/5">http://www.newsweek.com/id/104334/page/5</a></p>
 
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