Hey gang - your blogger is taking a breather.  I’m off to the wonderful Northeast, back to my roots, to spend time with my Mom & Dad, and celebrating my Grandmother’s 80th birthday.  I’m going for two weeks - with a week planned in Maine (at my Dad’s) and a week in Connecticut with my mom.

They, while excited to see me, are more thrilled at spending time with their first grandson.

Fear not readers - I have lined up the BEST bloggers in the housing and real estate blogosphere to contribute guest posts almost daily here at BlownMortgage.com.  I am incredibly honored that these folks have taken time to share their insight with us over here at BlownMortgage.com and we will all be better for it.

Look for the first one later today and every day thereafter.  I will continue to post news items as they come up, so keep the emails coming.  I won’t be far from the computer, but not chained to it.

Here is just a sampling of the authors contributing: Bloodhound Blog, Housing Wire, Brian Brady, Housing Doom, L.A. Land, Dr. Housing Bubble, and more.  If you’d like to contribute while I’m gone - shoot me an email and we’ll get you in the rotation.  I’m excited.

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Hey everyone, a friendly mortgage tip.  Let me know if this sounds like you:

• Your credit scores are 620 or below
• You haven’t had any late mortgage payments in the last 12 months
• You have a loan amount under $362,760
• That loan balance is less than 97.15% of your home value
• You have an adjustable rate mortgage set to adjust

If that sounds like you, and you are looking for a way out, how does this sound?

• 30-year fixed loan
• No prepayment penalty
• In the mid-upper 6% range
• 1% origination fee
• No junk fee charges

Sound good? You might be a potential candidate for FHA financing.  And if President Bush’s plans for FHA secure go through these great loans will be opened up to more people.  If you had a subprime mortgage loan and need to get out of a loan that is about to adjust to a payment you can’t afford try FHA.  It may be the best way for you to find an affordable monthly mortgage payment plus add some stability to your life as well.

Subprime adjustable rate mortgages are ticking time bombs, if you are in one and are near the end of the fixed period inquire about FHA refinancing.

Not every lender is FHA approved. If you are a subprime borrower (loosely defined as having a credit score of less than 620) the first question out of your mouth when talking to a loan agent is “Are you FHA approved?”  and don’t let them tell you “FHA isn’t that great” if they aren’t.  It is worth your time to determine if you qualify.

If the above sounds good to you, and you’d like to talk with an FHA approved lender, why, you can call me.  Morgan 866-363-9329 (the rest of my contact info is in the sidebar).

**Please note the bullet points above do not represent the entire qualifying guidelines or benefits of the FHA program.  To learn more please contact me directly.

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Market Watch is reporting that NovaStar will slash another 275 jobs in its retail loan division as a proposed securities offering that would have raised at least $100 million for operating and funding capital fell through.

In a cost cutting effort NovaStar will close 12 retail branches and trim 275 jobs.

From Market Watch:

NovaStar also said it will “sharply” reduce retail mortgage activity, closing 12 retail origination offices and cutting the number of employees in that part of its business to roughly 125 from 400.

NovaStar said it will now focus mainly on managing its $15.45 billion portfolio of securitized residential loans, plus mortgage securities.

 

“We are pulling back to focus on NovaStar’s core strengths and preserve liquidity,” Scott Hartman, chief executive of NovaStar, said in a statement. “Suspending wholesale lending and shrinking the retail operation are painful decisions, but we believe it is best, at this point, to concentrate on serving our current customers and managing our portfolio for the benefit of NovaStar shareholders.”

What an agonizingly slow death for one of the bigger subprime lenders. There has to be a point where the company taps out - we must be close.

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Filed under: Analyst reports, Google (GOOG), Apple Inc (AAPL), Cisco Systems (CSCO), Time Warner (TWX), Home Depot (HD), Indices, Halliburton (HAL), Altria Group (MO), NYSE Euronext (NYX), Goldman Sachs Group (GS), Duke Energy (DUK), Dow Chemical (DOW), Top Picks 2007, Valero Energy (VLO), PetroChina Co Ltd ADR (PTR), Huaneng Power Intl ADS (HNP), Level 3 Communications (LVLT), Chasing Value, S and P 500, DJIA

No surprise the volatile James Cramer of TheStreet.com carries the burden of having made the best and worst picks for the year among those I’ve been tracking monthly. Apple Inc. (NASDAQ: AAPL), the best performer among all the stocks and indices in this review, has saved his rear throughout the year. In general, it has been a good year for energy and tech stocks. It has been a poor year for the financial sector, and as of August, for most of the Wall Street investment firms.

August had some gut wrenching moments but finished on a positive note. Still, the Dow Jones Industrial Average’s 14,000 level has not been seen since the financial sector gave the bears something to grouse about. The housing market and subprime loans continue to worry the market, but no help is expected in the form of rate cut from the Federal Reserve.

Crude oil prices have been up slightly, but down at the pump even through the busy Labor Day weekend and even with continued turmoil in Iraq. All the speculation about a Dow 15,000…16,000…17,000 has come and gone and I have not read about such silliness lately.

The month of August continued the trend of stock picking outperforming the indices … again. Earnings reports still trickle in but nothing unexpected affected the market. Perhaps the most telling is that there are discussions of slowing in some industrial sectors but I think Wall Street is just too eager to jump on short-term news. The global economy is still clicking along in a positive direction and August was another month where Chinese stocks did very well. Mergers and acquisitions are showing some signs of slowing, but deals are still getting done.

This is my eighth follow-up where I compare my stock picks to Cramer’s and the indices. For reference, check out my original Dec. 28, 2006 post on the topic.

Summary of Results:

• Google Inc. (NASDAQ: GOOG) has continued to move up in the recent erratic stock market. It closed at $515.25, for a solid +11.39% gain through eight months of the year, holding the top spot.
• My picks continued to advance through August improving to a 6.14% gain year-to-date. Adding the dividend portion of 1.94% (2.89% x 0.67) brings the total return to +8.08% (improving on last month’s +7.09% gain for the first seven months). Clearly, dividends can help and make a noticeable difference when the returns are modest. Leading the way for me were Valero Energy (NYSE: VLO), which continued to be my best overall pick, gaining 32.75%, and Huaneng Power International ADS (NYSE: HNP) gaining 28.72% for the year so far. My biggest surprise and disappointment is Time Warner Inc. (NYSE: TWX), which is down 13.73% so far in 2007.
• Jim Cramer’s average return on his nine picks was 6.75% for the first eight months, beating the Standard & Poor’s index, but losing out to the DJIA and the NASDAQ. Cramer, however, did beat the average of the three indices. Adding the dividend portion of 0.44% (0.66% x 0.67) brings Cramer’s gain to +7.19%. Apple Inc. (NASDAQ: AAPL) was the best pick of the year among those discussed herein. There does not seem to be much that Apple can do wrong this year. Given new product and software launches and the continuation of current products and programs there is every reason to believe 2007 should be another one for the record books. Apple has been Cramer’s savior from disaster because some of his picks are in trouble for now. In particular, his worst pick, the New York Stock Exchange Group (NYSE: NYX).
• All of the Indices gained ground in August, with the DJIA, NASDAQ and S&P coming back the last week after some very tough trading days, for an overall average of +5.78.% year-to-date. Adding their portion of the dividend yield of 1.21% (1.8% x 0.67) brings it up to a total gain of +6.99%, which is not very exciting but safely beats out most fixed income securities. The overall market remains one where stock pickers seems to be topping the indices.

Note that portional dividends have been added to the results. This is one of the criteria I use in my stock picks and it is having an impact on the results thus far. Only three of Cramer’s picks pay dividends averaging about 0.66%. The Indices pay a higher average of 1.8% and my picks average still higher at about 2.89%. Google does not pay a dividend. The flatter the market is this year, the more the dividends will be a factor.

Google has not been the brightest star (or stock) this year, wavering at times as most speculative stocks do, but it was the best bet for the second month in a row. I still maintain that Value will beat Growth and indexing over the long run. Google will be the wild card! Two of my picks continue to be mentioned as buyout candidates but the rhetoric has died down considerably; The Dow Chemical Co. (NYSE: DOW) and The Home Depot (NYSE: HD). Home Depot continues to receive the most negative discussion in business circles these days although now the sub-prime loan mess is stealing headline space on a daily basis.

The following are the closing prices as of December 28, 2006 and eight month returns for the seven stocks I recommended plus the addition of Spectra Energy Corp. (NYSE: SE) that was spun out of Duke Energy (NYSE: DUK). Among Cramer’s picks Kraft Foods (NYSE: KFT) which was spun out of Altria Group, Inc. (NYSE: MO), is included in the calculations

1. The Dow Chemical Company: $40.02 is UP to $42.63 (+6.52%) 3.54% yield
2. Duke Energy: $33.02 (incl. of Spectra Energy (NYSE: SE)) is Down to $29.97 (-9.24%) 4.31 yield
3. The Home Depot Inc.: $39.73 is Down to $38.31 (-3.57%) 2.31% yield
4. Huaneng Power International ADS: $36 is UP to $46.34 (+28.72%) 3.62% yield
5. PetroChina ADR: $142.12 is Up to $144.33 (+1.56%) 4.5% yield
6. Time Warner Inc. (NYSE: TWX) $22.00 is Down to $18.98 (-13.73%) 1.1% yield
7. Valero Energy: $51.61 is UP to $68.51 (+32.75%) 0.84% yield

The following index comparisons are also from December 28, 2006 :

• Dow Jones Industrial Average: 12,501.52 is Up to 13,357.74 (+6.85%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,596.36 (+7.04%)
• Standard & Poor’s 500 Index ($INX): 1,424.73 is Up to 1,473.99 (+3.46%)

The Cramer Speculative Stocks for 2007:

1) Level 3 Communications (NASDAQ: LVLT) $5.66 is Down to $5.23 (-8.13%) No dividend
2) Rite Aid (NYSE: RAD) $5.49 is Down to $5.07 (-7.06%) No dividend
3) Savient Pharmaceuticals (NASDAQ: SVNT) $12.01 is Up to $13.18. (+9.47%) No dividend

The Cramer Growth Picks are:
1) New York Stock Exchange Group (NYSE: NYX) $97.51 Down to $72.75 (-25.39%) No dividend
2) Apple Inc. (NASDAQ: AAPL) $80.87 UP to $138.48 (+71.24%) No dividend
3) Cisco Systems (NASDAQ: CSCO) $27.42 Up to $31.92 (+16.41%) No dividend

The Cramer Value Picks are:
1) Altria Group (NYSE: MO) $86.23 UP to $69.41 +(Kraft at .692024 x $32.06 = 22.19) to $91.60 (+6.23%) 4.12% Yield
2) Goldman Sachs Group (NYSE: GS) $200.80 Down to $176.01 (-12.35%) .72% yield
3) Halliburton Co. (NYSE: HAL) $31.26 UP to $34.59 (+15.23%) .97% Yield

The New Powerhouse Google

I continue to track Wall Street darling Google since it is of broad interest to the investing public and internet users alike. Google closed December 28, 2006 at $462.56, rose in January, then traded downward for a few months before hitting new highs in June, closing the month at $522.70. In July Google hit another all-time high of $558.58. However a 3 cent earnings miss followed (based on analysts expectations) knocking it down considerably, about 10%. Since then it has found support at around $500 per share and traded in a very tight range between $505 and $515. Google ended the month of August at $515.25. for a solid YTD gain of $52.69 per share (+11.39%) building on last month’s performance. Google does not pay a dividend.

I will be reporting again during the week following the closing stock prices each month.

Disclosure: I own shares of DUK, HNP, PTR, SE, TWX, and VLO.

To find more potential opportunities and verify my track record read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

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Filed under: Major movement, Analyst reports, Internet, Google (GOOG), Yahoo! (YHOO), Marketing and advertising

The investors who are flocking to Yahoo! Inc. (NASDAQ: YHOO) today because Bear Stearns argued that the internet portal would make an attractive acquisition target need to take a deep breath and count to ten because any deal isn’t going to happen any time soon.

For one thing, internet advertising is going to take a hit over the next few months because financial services firms are going to cut spending due to the subprime mortgage meltdown. Plus, why would any company buy Yahoo! while questions remain about Project Panama.

Shares of Yahoo!, up about 6% this year, have gotten beaten up badly over the past year, tumbling about 19%. Pundits are predicting gloom and doom for the Sunnyvalle, Calif.-based company, which continues to struggle against Google Inc. (NASDAQ: GOOG) and other web sites such as News Corp.’s (NYSE: NWS) MySpace for advertising dollars.

The news, though, hasn’t been all bad. President Susan Decker and other top Yahoo! executives have been buying shares over the past few months. Yahoo’s traffic also will benefit as fantasy football season ramps up. Bloomberg News notes the initial public offering of Alibaba.com may boost the company’s earnings by 78 cents per share.

Those are more compelling reasons to buy Yahoo. Remember, a potential buyout is like a potential weight loss. The gap between theory and reality can be huge.

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Filed under: Rumors, Google (GOOG), Scandals

Valleywag reports that Google, Inc. (NASDAQ: GOOG) CEO Eric Schmidt is a serial adulterer. It alleges that Schmidt is “famous” for having a series of girlfriends to which he’s proposed marriage despite being married. And it claims that Schmidt’s girlfriends include Rita Koselka and Marci Simon.

But wait, there’s more. Google’s experiencing an office space crunch in New York where it hired so many people that its most recent financial report was too expense-heavy in the view of financial analysts. But despite that West Chelsea space crunch, Google was able to find a desk and phone line for none other than Marci Simon.

I guess this serial adultery falls outside of Google’s “Do No Evil” philosophy. Meanwhile, if Valleywag’s reports are accurate, I am questioning the judgment of Schmidt, Koselka and Simon.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Google.

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Filed under: Good news, Law, Google (GOOG), Marketing and advertising

For some time advertisers have objected when their competitors showed up in Google (NASDAQ:GOOG) search results for information on their companies. Clever marketers saw this as an easy way to pick off customers by targeting their rivals in the listings at the big search engine.

One of the oldest suits against Google for allowing this practice was recently dropped. American Blind & Wallpaper Factory had filed a suit against the practice in 2003, according to Reuters. For reasons that are hard to understand, “American Blinds stipulated that Google was paying nothing and making no change in policy in order for American Blind to settle the case.” Google has won several cases on the matter in the US and lost several in Europe.

Why did American Blind back down? Wall Street may never know. It is likely that the company either ran out of money to pursue the legal action or that earlier court victories by Google covering similar accusations made the plaintiff decide that its chances were falling.

Whatever the reason, it removes a significant headache for the Google AdWords program, the source of most of its revenue.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Filed under: Google (GOOG), Apple Inc (AAPL), Cisco Systems (CSCO), Intel (INTC), International Business Machines (IBM), Research in Motion (RIMM), Oracle Corp (ORCL)

While commodity and emerging market stocks have dominated the higher-end of the stock-performance charts this decade, if you look closely at the recent stock market correction, a massive sector rotation is occuring.

Intel Corporation (NASDAQ: INTC) is up 26.7% for the year, Cisco Systems Inc (NASDAQ: CSCO) is up 15%, Oracle Corporation (NASDAQ: ORCL) is up 18%, Apple Inc (NASDAQ: AAPL) is up 61%, Google Inc (NASDAQ: GOOG) is up 11%, International Business Machines Corporation (NYSE: IBM) is up 20% and Research In Motion Limited (NASDAQ: RIMM) is up 95%, noted Eric Savitz in this yesterday’s Barron’s “Technology Trader.” VMware Inc (NYSE: VMW), the recent IPO home run, is up 136% since beginning trading publicly.

The average technology fund is up 10% for the year, versus 3% for the S&P 500, according to Morningstar.

That is some serious food for thought. As a reminder, the great 1990’s bull market ended with tech taking the lead in the latter stages of the immensely profitable run. The economy slowed in the mid-part of the 1990s and when the economy picked up, money flowed into tech and telecom. It looks like the stage might be set for a similar move this decade.

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Filed under: Earnings reports, Deals, Bad news

Discount shoe retailer Payless ShoeSource is now Collective Brands (NYSE: PSS), and recently acquired children’s shoemaker Stride-Rite. Perhaps the split focus of trying to be both a discount and a full-price shoe store is what is causing profits to plummet. Collective Brands recently reported 2Q 2007 results. Profits dropped by 23% to just under $25 million, or diluted EPS of $0.38. Total sales were down 1%, not enough to worry, and same store sales were down 1.4%, again not enough to worry, yet. CEO Matthew Rubel blamed the downturn on weak sandal sales. Weak sandal sales in the summer? As good an excuse as any I suppose. But the fact remains the company is selling fewer shoes and making less money on those it does sell. 2Q numbers would have been even worse had the company not received $2.3 million from a lawsuit settled in its favor, and insurance payouts of $1.6 million to cover hurricane damage in 2006.

Collective Brands spent $1.8 million in 2Q 2007 on integration planning for the acquisition of Stride-Rite Shoes, an acquisition management states will have no impact, positive or negative, on earnings in 2008. Why not? What’s the hold up that it will take until sometime in 2009 to figure out whether Stride-Rite was a good acquisition? $725 million of the acquisition was financed by a loan. For that kind of money in a company of this size, shareholders have a right to see what kind of bang they may or may not be getting for their investment buck.

To be fair, 2Q reporting period ended in early August, just before the big back-to-school shoe buying period. Inventory expenses was up 5.5% because the stores were stocking up in preparation for back-to-school purchases. Perhaps 3Q numbers will be more positive. Collective Brands bought back $4.6 million of its stock, 141,000 shares, in 2Q as part of a $32 million share repurchase program. This still has not helped the stock, which opened the year trading at $32.89, and now trades right around $23.20.

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Filed under: Law, Scandals, Personal finance

If the results of a study from Actimize are accurate, fraud and organized crime are a serious problem in the financial services industry. Here is some of the data:

• “73 percent of respondents, rate the finance industry’s readiness to tackle the employee fraud problem as poor to somewhat acceptable.”
• “Of those who knew, 50 percent said they have had a case of data theft in the last 12 months.”
• “85 percent of respondents have been affected by employee fraud and 65 percent see the threat increasing.”
• “More than 50 percent of respondents believe that half, or less, of employee fraud occurring at their institutions is being detected.”

This is pretty scary stuff — especially given how dependent so many Americans are on the industry. If workers have no problems stealing from their employees, is your portfolio safe? Can you trust that those of who a fiduciary responsibility to you are really acting in your best interests, and aren’t motivated by their own greed?

In his book Why Smart People Do Stupid Things with Money, Bert Whitehead suggests the use of fee-only financial advisors as a safeguard against the self-dealing financial services industry.

Given how rampant self-dealing appears to be, that seems like a good idea. Of course, you could also handle your finances yourself if you are willing to do devote the time to become a personal finance expert.

Thanks to the FraudFiles blog for bringing this survey to my attention.

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