Personal Income and Outlays

Income up 1.4%, outlays up 0.3%, core PCE up 0.1%, expected up 0.3%, 0.3%, 0.1%, market neutral.

Weekly Jobless Claims

Weekly jobless claims stood at 627k, higher than the 600k economists had estimated. This data was bond friendly.

GDP for Q1

In news released this morning, Q1 Gross Domestic Product (GDP) fell 5.5%, better that the expected -5.7%. GDP will be more closely watched in the future as the US and other nations spend wildly to stabilize both their banking systems and economies. Yesterday Europe pumped 622B into the banking system. For budget purposes, GDP is used to derive anticipated tax receipts, which is the cash governments use to pay their bills. If GDP falls short of estimates later this year, tax receipts will suffer and the deficit will SWELL.

Durable Goods Orders and New Home Sales

In news released this morning, orders for durable goods rose 1.8%, sharply higher than expectation for a decline of 0.6%.

On the housing front, new home sales stood at 342,000. Traders were expecting a sales pace of 360K. The data released this morning was split with stronger orders for durable goods and weaker than expected housing data.

Existing Home Sales for June 23, 2009

Existing home sales stood at 4.77M, weaker than expectation for 4.82M. This data was bond friendly.

The release of this data also came with some welcomed comments from the National Association of Realtors (NAR). Since the inception of the Home Valuation Code of Conduct (HVCC), which was on May 1st of this year, 5% of all purchase contracts have been cancelled due to very low appraised values. This has been a problem for the mortgage industry for refinances as well. The utilization of Appraisal Management Companies has created a bottle neck through conservative values as well as inflated costs due to a middle man looking for compensation. The NAR and other associations are putting pressure on the HVCC's creator, the NY Attorney General, to eliminate this system, altogether. If you haven't done so already, you can voice your opinion through the electronic petition located at http://www.hvccpetition.com/. To date, there are over 38,000 signatures.

Philadelphia Fed Survey - June 18th

The Philadelphia Fed business conditions index fell 2.2, not as much as the expected 17.0 decline.

Leading Economic Indicators - June 18th

Leading economic indicators up 1.2%, expected up 0.9%, not bond friendly.

Industrial Production and Capacity Utilization

Industrial production fell 1.1%, weaker than the expected 0.9% decline. Capacity use came in at 68.3, lower than the expected 68.4 mark.

Producer Price Index (PPI)

Producer prices rose 0.2%, lower than the expected 0.6% increase. The core, which excludes volatile food and energy fell 0.1%, weaker than the expected 0.1% increase.

Housing Starts for June 16, 2009

Housing starts rose 17.2%, significantly higher than the expected 6.9% increase. In a rare instance, the housing figures are overshadowing the inflation data. Housing is a huge sector of the economy. Signs of strength or rebounding in the housing sector has broader implications for the economy as a whole. The data reinforces earlier data that shows the economy may be turning.

Important announcement regarding appraisals

HVCC CALL TO ACTION

After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, Director of FHFA (GSE Regulator) James Lockhart, and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.
In order for this "Call to Action" to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing everyday, until advised to stop by NAMB. This will NOT be a one day action!
We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC has created delays and additional costs to consumers. NAMB has categorized and compiled a report of the examples received, which was sent to FHFA Director James Lockhart. Please use your own examples in your conversations with legislators, regulators, or their staff. Also, please visit the NAMB HVCC Resource Center for additional information and documents on the HVCC.
Who will you be contacting?
NY Attorney General Andrew Cuomo's Office: (212) 416-8000, Internet ComplaintFederal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.govFannie Mae: (202) 752-7000, headquarters@fanniemae.comFreddie Mac: (703) 903-2000, Internet ComplaintSenators, Representatives and Governors: Click here for contact information.Also, please contact your local TV and Newspaper outlets.Below are talking points and background information to assist in your conversations. Please remember we are all professionals and should conduct ourselves accordingly in any communication with the above parties. For the most successful and influential calls, it is important to concisely quantify how the HVCC is affecting your consumer and your business.
Talking Points:
1) NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.
2) Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.
3) AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.
4) HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo's investigation.
5) No Portability! Consumers are "trapped" with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.
Background:
I. Lack of Portability A. Lenders are not allowing borrowers to transfer appraisals, regardless of the reason. B. Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender. C. In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.
II. Lack of Quality A. AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal. i. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence. B. Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.
III. Increased Cost of Appraisals A. The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction. B. $150.00 - minimum increase per appraisal$561.95 - average loan amount of $224,778 at .25% for extended lock period$711.95 - average total increase per transactionx 3,870,552* - 2007 HMDA report of residential real estate loans originated$2,755,639,496 - $2.8BILLION in increased fees to consumers!
IV. Articles Illustrating the Effects of the HVCC A. The Appraisal Bubble - The Center for Public Integrity B. The Cure is Worse than the Disease - Appraisal Press C. Appraisals Roil Real Estate Deals - The Wall Street Journal i. Feel free to forward these articles and/or reference them in your conversations.

Trade Date for June 10, 2009

Mortgage bond prices opened sharply lower Wednesday morning driving mortgage rates higher. Rates are under pressure from stronger equity prices overseas and concerns over the upcoming 10-year Treasury auction today. In news released this morning, the trade deficit stood at 29.16B. This data was near estimates and had little effect on trade.

Treasury Auction for June 9, 2009

Both events of the day, Geithner’s testimony and the 3-year Treasury auction went well. Mr. Geithner did not step off script and the 3-year auction was very well bid. Indirect bidder participation, an indication of foreign demand for US debt, was nearly 50% of the auction, up 10% from the last 3-year. High indirect bidder participation is a key factor in determining if and auction is good or bad. The US relies on foreign accounts to finance our deficits.

Employment Report for June 5, 2009

Unemployment @ 9.4%, expected @ 9.2%, Payrolls -345k, expected -520k, mixed but initial reaction is terrible for bonds.

ADP Employment Report

The ADP employment release showed job losses in excess of expectations. Job losses came in at 535k, expected at 525k. Last month's figures were also revised from losses of 491k to 545k. Overall very bond friendly.

ISM Index

ISM Index came in at 42.8, higher than the expected 42.3 mark.

Construction Spending Report

Construction spending rose 0.8%, stronger than the expected 1.3% decline.

Personal Income and Outlays for June 1, 2009

Personal income rose 0.5%, higher than the expected 0.2% decrease. Spending fell 0.1%, not as weak as the expected 0.2% decrease. Overall not very bond friendly.