Big Mac

Happy Hump Day! It's all about the Big Mac...as in Freddie Mac. I'm still "lol" from the Freddie quote yesterday but today is no laughing matter. The mortgage giant posted an $821 million dollar loss for Q2. That's exactly 3x larger than Wall Street predicted. Ouch! Just one year ago the mortgage giant boasted a $729 million dollar profit. The biggest losses were seen in states like Florida, California, Nevada and Arizona. CoininkyDinky...these states also showed the largest jumped in their average home price during the height of the market. Hmmm....I smell some exotic mortgage funk!

Here's a little "Did you know"...Did you know that Fannie Mae and Freddie Mac combined, hold 1/2 of the US Mortgage debt. Take a moment to digest that por favor. Let's play the blame game shall we? Playing with us today is a group of fabulous home mortgage clients we'll call "Alt-A." "Tell us a little bit about yourself Alt-A." "Well, we have a lot of members in our group, we have good to great credit and little to no cash. We enjoy not documenting our income and nothing about us really adds up when you look closely enough." "Excellent! You sound like great candidates for 100% financing on your 4th primary residence! Johnny, roll out the red carpet!"

That's a scary game to play. Most investors in the mortgage game rolled the dice on these very people. They were quick to blame sub-prime lending when everything came crashing down, when in fact it was the over extended, good credit havin folk that were give free reign to buy buy buy! "Alt-A" represents 10% of current mortgage loans. That's a big number. It's your No Docs, your stated income your no ratio type of loans. Often referred to as "exotic" mortgages. Anything "exotic" should be an exception not a rule. It became a rule and that rule was quick to be broken!

When all is said and done Fannie and Freddie are trying to work through their problems without the help of big brother (Gov't). The government is bendin over backwards to help the mortgage giants bcs they know if Fannie and Freddie fall, the mortgage market will fall like a house of cards. No one wants that. In off topic news, oil is down again! I'm running on "E" whilst I wait to see what happens at the pump. If you happen to see me stranded on the road, please don't wave and pass me by. I don't bite.

In Hollywood news, look for Peter Brady to host the new Trivial Pursuit game show. Perhaps now we'll see less of his reality show disaster and his crazy wife. If Madonna loses any more weight I'm going to send her a care package. She looks terrible! Eat something already! A-Rod doesn't like skin and bones...kidding! Jen Aniston is denying that she and her boy toy John Mayer will wed. Ok he's been with every Hollywood hoochie. I'd get him checked and double checked before I put that ring on my finga!

Have a great day!