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The debate about how high gas prices might affect auto insurers has been supplanted by concerns over how their balance sheets may look in light of investments that have turned sour in recent weeks. How individual companies will be affected by the economic slowdown will vary in the short term, but it seems likely that overall they will have some difficulties. The credit crisis comes at a particularly bad time for the auto insurance industry as their prices have fallen in recent years due to competition pressures. The government seizure of AIG also portends some upcoming shifts in market dynamics. AIG has indicated it is likely to sell off assets to repay federal loans, and with no announced buyer, the degree to which this will affect market concentration remains to be determined.

The President has backed off threats to impose financial penalties on states that have enrolled too many children in a State Federal insurance program. Fifteen states were threatened with penalties to take effect Monday if they failed to remove children from families with incomes of 250% of the poverty line from the program. Legislators argued that the new guidelines, including a requirement that children go uninsured for one year prior to being enrolled, were too stringent and would result in too many children going uninsured. The State Children’s Health Insurance Program, or SCHIP insures 6.6 million people, an overwhelming majority of whom are children. Compliance concerns haven’t evaporated, but for the immediate future, their enforcement and resulting fines and loss of Federal funding have been taken off the table.

President Bush has dropped his threat to veto the housing rescue bill. His threatened veto was based mostly on $4 Billion to be given to states to enable them to buy and rehabilitate foreclosed properties. Questions were raised by Senator Jim DeMint, R-S.C., after learning that one of the bills architects, Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., received a mortgage deal through a VIP program at Countrywide. Unsure how much Countrywide and other retail mortgage lenders stand to profit from that $4 Billion, DeMint and Sen. Jim Bunning, R-Ky., attempted to send the bill back to committee but were defeated, 70-11. Other attempts to send back the bill to be rewritten were similarly defeated. This bill which offers some relief to homeowners on the brink of foreclosing, have broad bipartisan support in this election year, indicating there may be enough votes to override a veto. Eager to avoid a protracted veto fight, President Bush dropped his threat, indicating that restoring confidence and stability to the financial markets was a goal that was better tended to sooner than later.

“Home prices in 20 major U.S. cities have dropped a record 15.3% in the past year. We are back to where we were in 2004, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s.” Yesterday’s Wall Street Journal article started a firestorm of opinion and thoughts amongst my friends and colleagues and I wanted to share it with you. While home prices are at their lowest in the last five years, market saturation is at its highest; no one is buying or selling homes.

The mortgage industry will get better.  In fact, almost everyone agrees that the mortgage industry will improve.  We have heard our President and economists claim our country’s financial health is stable but isn’t that kind of like saying “It can’t get any worse”.   Surely it can’t get worse, could it?  Are we somehow missing the signs of economic improvement?  Are we deaf and blind to the signals and signs of a recovering mortgage industry? 

People, you heard it here first, okay maybe second, or third, but you heard it here nonetheless. As of now, you should be marketing to all of the old leads in your database so you can capture business that you missed out on in the past. There are strategies to make you successful doing this, they are called Best Practices, and we would like to share them with you.

Wall Street started the session today racing toward gains however the latest economic data helped confirm investors’ fears that the economy is falling into a recession.  Investors were looking for data that would be help to stave off a sharp economic slowdown, and at the same time still warrant further cuts of the federal funds rate. Investors pulled the plug on trading for gains when a report from the Philadelphia Federal Reserve showed manufacturing fell more than forecasted. This manufacturing reading is the Conference Board’s gauge of leading economic indicators and it is used to predict which direction the economy is headed. It has posted its fourth straight drop.

Well maybe not a savior, but definitely a helping hand at least. Six major banks have banded together and put a moratorium on forclosure proceedings for 30 days to allow borrowers to work out alternative payment options with lenders. Contrary to what one would think, this is not just for ARM loan borrowers, but all kinds.

It’s an interesting concept. This also may open up some opportunity for mortgage companies to capture good business. Read more about it here.

I am going to keep this post very, very short and simple. I can only write about Hillary for about 30 seconds before I start getting political and this is not the right forum.

So with that said, I would like you all to take a look at a very intriguing blog post I just read over on the Blown Mortgage blog. Take a look, what do you think?

Has anyone else noticed a general calm lately? Perhaps an uneasy ‘uhh, what’s next?’ kind of feeling in the industry? Not to say that things are looking peachy and that people aren’t wondering if their company will be around tomorrow…I think we’re still a couple years, or at least several quarters away from that. But a more positive outlook on the future of the mortgage industry? Anyone else, or am I alone here?