Economic activity picks up.
Author: Christian Amstadter

In PA, Leaders of g-20 began their two-day PA summit. They
have already warned economists that the recovery is still
too fragile to even think about ending governments' massive
liquidity injections. And speaking of a fragile economy,
yesterday's Fed announcement was almost identical to their
previous meeting's announcement:

"...following its severe dowturn economic activity has
picked up...conditions in financial markets have improved
further, and activity in the housing sector has
increased...household spending seems to be stabilizing, but
remains constrained by ongoing job losses, sluggish income
growth, lower housing wealth, and tight credit. Businesses
are still cutting back on fixed investment and staffing,
though at a slower pace; they continue to make progress in
bringing inventory stocks into better alignment with sales.
Despite the economic happenings is likely to remain
relatively weak for some time, the Committee anticipates
that actions regarding policy to stabilize the institutions
and markets, fiscal and monetary stimulus, and forces in
the market will support a strenghtening of economic growth
and a steady return to larger levels os utilization in a
context of stability regarding price...inflation will
remain stagnent for awhile."

An important item to note is that "the Federal Reserve will
continue to employ a wide range of tools to promote
economic recovery and to preserve price stability." This
includes keeping overnight rates near 0% for an extended
period, and purchasing a total of $1.25 trillion of agency
mortgage-backed securities and up to $200 billion of agency
debt. "The Committee will gradually slow the pace of these
purchases in order to promote a smooth transition in
markets and anticipates that they will be executed by the
end of the first quarter of 2010. As previously announced,
the Federal Reserve's purchases of $300 billion of Treasury
securities will be completed by the end of October 2009."

In recent weeks, the Fed has been buying mortgage-backed
securities (remember, NOT whole loan deals backed by
private-label or jumbo production) at a steady pace of $25
billion per week. This many slow, but only marginally so,
in the immediate future.

No one told this to the buyers of the Treasury's 5-yr note.
The results of the 5-year note auction were not pretty, but
not terrible, coming in at 2.47% versus the existing 5-yr
at 2.44%. But the bid to cover seemed to be in line with
other auctions from before, and bidders indirectly took
down .forty five percent of the auction, that which
compares to fifty percent for the 5 years priors note
auctions. As of this morning wee have had jobless claims
and should see existing home sales at 8am. We also have a
$29 billion 7-Year Note auction. Claims for jobless
benefits fell by 21,000 last week to 530,000 - better (for
the employment picture) than expected. The four-week moving
average of new claims dipped to 553,500, the lowest since
late January. After the Jobless Claims news the new 5-yr is
at 2.40%, the 10-yr is at 3.40%, and 30-yr mortgage
security prices are up (better) slightly.

Regarding the new TILA requirements, Wells Fargo
correspondent channel made clients aware that they
"tweaked" their view on the timing of the initial TIL and
disclosure. Wells has to decided to expand the options to
accomodate different deliver methods allowing shorter post
time if documented as follows: Fax: Initial and
re-disclosed TILs delivered to the borrower(s) by fax will
be considered "received" by the borrower(s) on the date
they sign and date the TIL disclosure. Other methods of
documenting receipt, such as time/date stamps in the fax
header, or fax confirmation sheets, are not sufficient.
Overnight delivery: Initial and re-disclosed TILs shipped
overnight to the borrower(s), will be considered "received"
by the borrower(s) on the date they sign and date the TIL
disclosure. Other methods of documenting receipt, such as a
signature on an overnight courier receipt, are not
sufficient. E-mail/E-Sign: Because the Truth-in-Lending Act
requires that delivery of disclosures electronically be
done in compliance with the federal E-SIGN Act, initial and
re-disclosed TILs may only be delivered to the borrower(s)
electronically by Sellers who are approved by Wells Fargo
for E-Disclosure, and who deliver the documents through
their approved E-Sign Technology software." The subject
tends to be very sticky and Wells clients should look to
the bulletin for more specifics.

CitiMortgage came out with their Reg. Z notice and
"higher-priced mortgage loan" note. "Each loan that you
sell to CitiMortgage comes with your representation and
warranty as to compliance with these provisions and any
other federal, state or local law or regulation governing
the origination of consumer mortgages." Citi goes on to
mention HPML ineligible products, including FHA Fixed Rate
and ARM loans, VA ARM loans, VA IRRRL, conventional ARM
loans with an initial fixed rate period of less than 7
years, partial term buy downs, and loans with a DTI greater
than 45%, or as limited by the process or program. Citibank
has some newer fields when one is going to the web
registration field, so check them out.

With regards to of Citigroup, Citi, according to a article
in the WSJ, plans to "cut back its U.S. branchs to six big
metropolitan areas, and also plans to "Cap its consumer
lending business in the United States primarily to Jumbo
Loans and credit Cards, catering largely to wealthy
customers." The story said that the bank would "put
emphasis on Chicago, Washington, New York San Francisco and
LA, but would pare its business in Texas, Boston and PA."


About the Author:

As a consumer advocate in many arena's, Christian Amstadter
likes to provide up to date information on things affecting
our Mortgage and Real Estate Industry. With more than 10
years experience and hundreds of publications, the best
choice for daily updates, videos, FREE No Closing Cost Rate
quotes and more :> Visit >>>>>>

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