This past week may have been doomed from the get-go in terms of participation. Data was light... No auctions... Volume was light considering the tape-bombs. Next week will try to make up for it with a full 5 days of fury, including a round of Treasury auctions at the lowest yields since as far back as most of us have records. Auctions actually kick off on Monday in order to make room for TIPS and T-bill announcements on Thursday. Data highlights include PPI, Retail Sales, CPI, Industrial Production, Philly Fed (yes, already!). Perhaps most importantly, it's the last week before the 2 day Fed Meeting on 9/20 and 9/21.

Beginning Monday, September 12, 2011, lenders will no longer be able to order a streamline refinance case with an appraisal. The only available streamline refinance case type will be streamline without appraisal. A prior FHA refinance case with appraisal should be ordered as a fully processed Prior FHA case with an appraisal.

Beginning Monday, September 12, 2011, for Streamline Refinances cases without an appraisal, when a prior FHA refinance case is netted to a new case number, the outstanding principal balance for the projected month of closing and the following month will automatically be provided in FHA Connection. These fields will appear on the Case Number Assignment screen when the case number is assigned. They will also appear on Refinance Authorization and Refinance Credit Query. The values will be used to limit the entry in the Unpaid Principal Balance field on FHAC Insurance Application for FHA to FHA refinance cases. The Unpaid Principal Balance amount is used to determine the maximum mortgage allowed for the case. For this reason, it is very important that the lender enter an accurate projected closing date. If they find the entered closing date is no longer accurate, they should correct it, prior to remitting UFMIP, using FHAC Refinance Authorization to obtain a new outstanding principal balance from A43 before processing Insurance Application.

Subject: Mortgage Record Changes and Data Reconciliation

Purpose: This Mortgagee Letter announces that FHA approved Holders and Servicers are subject to sanctions for failure to report Mortgage Record Changes (MRC) for mortgage sales, transfers and terminations of mortgage insurance. Mortgagees who fail to comply may be subject to referral to the Mortgagee Review Board (MRB) for administrative actions including but not limited to civil money penalties…

Read the Letter Here

Hard to miss the rally in 10yr yields. 1.896 at one point, but now rebounding to 1.925. MBS have risen to all time highs in 3.5's but reprices for the better still might be hard to come by. Here are a few reasons

- Rapidity of rally = high implied volatility. MBS don't like volatility and neither do lenders making rate sheets.

- This is all EU Panic-driven. Greek default, Stark exit, take your pick. If Greece is alive on Monday, no more 1.8's in 10yr notes (probably?)

- we don't normally see aggressive moves on MBS settlement dates. Lenders will probably want more assurance of current benchmark ranges before getting more aggressive with rates.

- Lenders have recently gotten more aggressive with rates anyway! Another move down so quickly is going to cause capacity and fallout issues.

bottom line though, this speaks to bigger reprices for the better. If we hold or improve upon these levels, "token" reprices for the better are quite possible.

(Reuters) - Global regulators must balance the need to crack down on risky practices that could set off another financial crisis against the imperative of economic growth, a U.S. central banker said on Friday.

Just as lax rules on lending helped fuel a housing bubble that then burst with disastrous consequences, overly strict rules might prolong the economic doldrums, San Francisco Federal Reserve Bank President John Williams suggested in remarks prepared for delivery at a San Francisco Fed symposium on Asian banking.

"It's important to talk about both sides of the coin - the threat represented by a buildup of systemic risk and the cost of policies and practices that contain that risk," Williams said in the text of the remarks, made available by email in Chicago. "The challenge is to design a regime of macroprudential supervision that maintains financial stability and maximizes long-term economic growth."

A legislative overhaul after the 2007-2009 crisis gave the Fed new powers to oversee systemically important financial institutions, the rules for which are still being written.

Those rules could have important economic consequences, Williams cautioned, including possibly restricting credit and therefore economic growth.

Williams did not comment on monetary policy or the economic outlook in his prepared remarks

(Reporting by Ann Saphir, Editing by Chizu Nomiyama)