Morning Report: Head of the MBA explains why credit is so tight

Vital Statistics

	Last	Change	Percent
S&P Futures	1945.0	0.3	0.02%
Eurostoxx Index	3054.7	-1.4	-0.05%
Oil (WTI)	97.17	-0.4	-0.43%
LIBOR	0.233	-0.001	-0.30%
US Dollar Index (DXY)	81.45	-0.143	-0.18%
10 Year Govt Bond Yield	2.40%	-0.01%
Current Coupon Ginnie Mae TBA	106.6	0.1
Current Coupon Fannie Mae TBA	105.7	0.1
BankRate 30 Year Fixed Rate Mortgage	4.27

Markets are flattish on no real news. Bonds and MBS are higher.

Initial Jobless Claims rose to a six week high at 311,000. That said, initial jobless claims are pretty much back to boom-time levels. Consumer Comfort ticked up last week, according to Bloomberg.

Import prices fell .2% month-over-month and rose .8% on an annual basis. Oil drove the decrease. Ex food and fuels, import prices were flat. 

The latest CoreLogic Market Pulse is out. Home prices increased 7.5% year-over year, while foreclosure inventory is down 35%. However, foreclosure inventory is still not far off peak levels in the judicial states of New Jersey and New York. 

In another warning sign for the economy, Wal-Mart reported flat same store sales and cut its forecast for the year. The low-end consumer is still trying to pick themselves up off the mat. Health care costs were a factor in the revision as well. Separately, Cisco is cutting 6,000 jobs as it struggles to compete with software that manages data and internet traffic. 

The head of the Mortgage Bankers Association schools the left explains why credit is so tight. Having exposure to treble damages (in other words three times the loan value) if a FHA loan goes bad and the government finds an error in your file tends to dissuade people from making these loans and is why Jamie Dimon fired a shot across the bow of the government on FHA loans. Meanwhile, the sky has turned legal pad yellow as the lawsuits against the industry continue unabated.